The objective of this prospective observational study was to assess the growth and body composition of term small for gestational age (SGA) infants from birth to 6 months and evaluate the effect of catch-up growth (CUG) on body composition. Term SGA newborns were recruited at birth. Anthropometry and body composition were evaluated at 3 days, 6, 10 and 14 weeks, and 6 months. Fat and fat-free mass (FM and FFM) were compared between infants with and without CUG (increase in weight Z-score by >0.67) by air displacement plethysmography. Factors that could affect body composition and CUG, including parents’ BMI and stature, infants’ weight, gender and feeding were evaluated. 143 SGA newborns (66 boys) with birth weight of 2336 ± 214 g were enrolled; 109 were followed-up till 6 months. Median weight Z-score increased from -2.3 at birth to -1.3 at 6 months, with 51.9% of infants showing CUG. Infants with CUG had higher FM (1796 ± 491g vs. 1196 ± 474 g, p<0.001) but similar FFM (4969 ± 508g vs. 4870 ± 622g, p=0.380); and consequently higher FM% (26.5 ± 5.8 vs. 19.7 ± 6.9, p<0.001), compared to those without CUG. Lower birth weight, exclusive breastfeeding and higher parental stature were positively associated with CUG. In conclusion, CUG in term SGA infants in first 6 months of life was almost entirely attributable to greater gain in fat mass. Follow-up of this cohort will provide insight into the long-term effect of disproportionate gain in FM in early infancy in SGA babies.