Although inhaled nitric oxide (INO) improves oxygenation in critically ill neonates, the neurodevelopmental outcome of premature neonates with severe hypoxemic respiratory failure treated with INO has not been reported. Mortality and prospective neurodevelopmental assessment in early childhood were studied in a cohort of 24 very low birth weight neonates (≤1500 g) consecutively admitted from 1993 to 1997 and rescued with INO because of severe hypoxemic respiratory failure (oxygenation index 28 to 52) unresponsive to aggressive conventional treatment. Significant improvements in arterial oxygen tension and oxygenation index with lower inspired oxygen concentration and less ventilator support after initiating INO were observed (P < .05, analysis of variance). Despite the dramatic improvement in systemic oxygenation, the mortality rate was high (14 of 24, 58%). Only 6 of 23 had normal cranial ultrasonographies. At 13 to 40 (22 ± 10) months of adjusted age, 10 survivors had Bayley Scales mental and psychomotor developmental indexes of 81 ± 21 and 64 ± 22, respectively. Of the 10 children, 5 (50%) were disabled, 2 (20%) were developmentally delayed, and 3 (30%) had normal development. In view of the poor outcome in very low-birth-weight neonates rescued by INO, randomized controlled trials are required to examine the role of INO in premature neonates. Before, during, and after INO therapy, cranial ultrasonography is recommended. (J Pediatr 1998;133:735-9)