Continuous 12-hour electroencephalography (EEG)-sleep studies were acquired by a computerized monitoring system under environmentally controlled conditions for 2 groups of neonates. Eighteen health preterm infants at a postconceptional term age were matched to 18 term infants. These 2 groups were also matched for gender, race, and socioeconomic class. For the entire 12-hour recording, relative spectral power values (i.e., ratio of specific EEG power in specific frequency band compared to total EEG power) were significantly reduced in the preterm group for theta (P < or = .007), alpha (P < or = .001), and beta (P < or = .018) frequency bands, while delta remained unchanged. Correlations between 91 pairs of EEG channels were also calculated and the preterm infants had significantly higher correlation values in 27 of the 91 pairs of channels (P < .05); 14 interhemispheric, 8 intrahemispheric, and 5 sagittal combinations, while 3 intrahemispheric combinations were higher in the term group. Fewer functional neuronal aggregates generate less oscillatory potential (i.e., lower spectral power) in the theta through beta frequency ranges in the preterm infant, while greater cortical connectivity (i.e., higher correlations) exists in many brain regions by postconceptional term ages in this group. These findings suggest a functional alteration in brain development of the preterm infant as a result of prolonged extrauterine experience and/or prematurity.