The neurodevelopmental disabilities of those who were born prematurely have been well described, yet the underlying alterations in brain development that lead to these changes remain poorly understood. Processes that are vulnerable to injury in the developing brain include maturation of oligodendrocyte precursors and genetically programmed changes in cortical connectivity; recent data have indicated that diffuse injury of the white matter accompanied by neuronal and axonal disruption is common in prematurely born infants. Recent advances in MRI include diffusion tensor imaging and sophisticated image analysis tools, such as functional connectivity, voxel-based morphometry, and mathematical morphology-based cortical folding strategies. These advanced techniques have shown that white matter structure is dependent on gestational age and have started to provide important information about the dynamic interactions between development, injury, and functional recovery in the preterm brain. Identification of early biomarkers for outcome could enable physicians and scientists to develop targeted pharmacological and behavioural therapies to restore functional connectivity.