We present the case of an infant with hypoxic-ischemic encephalopathy in whom wallerian degeneration is demonstrated in white-matter fiber tracts by diffusion magnetic resonance imaging (MRI). MRI was undertaken on days 2 and 9 and then at 9 months of age. On day 2, conventional MRI was normal, but diffusion MRI showed bioccipital abnormalities. On day 9, diffusion MRI showed marked abnormalities in the deep white matter of the occipital regions (left > right), corpus callosum, left posterior limb of the internal capsule, and left cerebral peduncle. Water apparent diffusion coefficient values showed a significant reduction in the left occipital white matter and corpus callosum between days 2 and 9 while demonstrating the expected pseudonormalization in cortical gray matter. Images at 9 months showed left occipital porencephaly and atrophy of the left cerebral peduncle, with the infant displaying right hemiplegia at 18 months of age. In this case, the time course of diffusion changes differed between white and gray matter, with diffusion MRI showing delayed wallerian degeneration of the cerebral white matter. This case characterizes this degeneration with clinical and follow-up MRI at 9 months of age.