AIM: To investigate the development and behaviour of low-birthweight (LBW) term infants compared with matched term infants of appropriate birthweight (ABW). METHODS: Two parallel cohorts of LBW infants (1500-2499 g) and ABW controls (3000-3499 g) were enrolled at birth in northeast Brazil. At 8 y, 164 children were assessed using clinical and psychological tests. RESULTS: The LBW group had lower IQ scores than ABW children on the Weschler Intelligence Scale for Children; differences were larger on the performance (5 points, p = 0.04) than the verbal scale (3 points, p = 0.11). LBW children had poorer dynamic balance (p = 0.03) and eye-hand coordination (p = 0.02), but better selective attention (p = 0.02). Hyperactivity and conduct problems were common in both groups, but fewer LBW children had peer problems (p = 0.04). After controlling for social background, IQ was not significantly associated with birthweight (p = 0.10). Significant determinants were maternal education, home stimulation and type of school attended. The effect of birthweight on coordination and selective attention remained significant. Birth head circumference and growth in head size in the first 6 mo had independent effects on IQ. CONCLUSION: After controlling for social background, LBW term infants did not differ from ABW infants in cognition at school age. Head circumference at birth and 6 mo was a better predictor than birthweight of IQ.