This study investigated the accuracy of prediction of neurodevelopmental outcome at 1 year using cerebral proton magnetic resonance spectroscopy (MRS) and structured neonatal neurological assessment in term infants after presumed hypoxic–ischaemic brain injury. Eighteen control infants and 28 infants with presumed hypoxic–ischaemic brain injury underwent proton MRS investigation. Studies were carried out as soon as possible after the cerebral insult, most within 48 hours. Infants had an early structured neurological assessment at a median of 19 hours (range 0 hours to 9 days) from the presumed hypoxic–ischaemic insult and a late assessment at a median of 7 days (range 3 to 25 days) during recovery. The maximum cerebral peak–area ratio lactate:N-acetylaspartate measured by proton MRS accurately predicted adverse outcome at 1 year with a specificity of 93% and positive predictive value of 92%. Neurological assessment had a tendency for false-positive predictions. However, both early and late neurological examination can be used as a reliable indicator for a favourable outcome at 1 year having negative predictive values of 100% and 91% respectively.