This study examines the growth and development of 37 preterm infants, 20 with respiratory distress syndrome and 17 with bronchopulmonary dysplasia. The groups were balanced by sex, parity, family configuration, and socioeconomic status and were studied at either 12 or 18 months after hospital discharge. Findings indicate that infants with bronchopulmonary dysplasia are at greater risk for growth retardation in their second year than infants with respiratory distress syndrome. Furthermore, results from cognitive, sensorimotor, and language measures (the Bayley, Uzgiris-Hunt, and Receptive-Expressive Emergent Language scales) demonstrate that infants with bronchopulmonary dysplasia perform significantly less well than infants with respiratory distress syndrome. The group performance of the infants with respiratory distress syndrome suggests that their developmental scores are comparable to those of average, healthy full-term infants of the same age. In contrast, the group of infants with bronchopulmonary dysplasia performed in the low-average to delayed range. Moreover, regression analyses show that type of respiratory illness explains more of the variance in cognitive outcomes than such neonatal factors as birth weight or gestational age. Thus, this study demonstrates that infants with bronchopulmonary dysplasia are at high risk for developmental problems in their second year, and that the contribution of bronchopulmonary dysplasia to explanations of differential cognitive outcomes cannot be reduced to between-group differences in perinatal status.