The impact of 2 environmental and 2 biological risk measures was studied in 175 preterm children. Levels of family risk, which included family composition, support, and interaction variables, and social class, as well as increases or decreases in family risk over the 1 st year of life, were examined with intraventricular hemorrhage (IVH) and other neonatal medical complications as predictors of cognitive and motor outcomes in the 2nd year of life. Family risk, early medical risk, and the Family Risk x IVH interaction emerged as significant predictors of later development. Family risk had less impact on subjects at highest medical risk. Different regression equations for each outcome underscored the specificity of environmental effects on developmental outcomes.