This investigation involved the longitudinal assessment of 30 mother-preterm and 40 mother-full-term dyads from birth to 2 years of age. Measures of maternal attitudes, maternal perception of the infant, and parental functioning were obtained at 1 and 8 months of infant age. Mother-infant interactions were observed at 4, 8, 12, and 24 months. Infant cognitive, motor, and language development was assessed at 4, 12, and 24 months. Results indicated that by age 2 years, no group differences were apparent on any child development, mother-child interaction, or maternal attitudinal measures; the lone exception was that preterms were significantly poorer in motor skills. This similarity in functioning at age 2 years was in marked contrast to earlier findings of major group differences at 12 months. Correlational and regression analyses indicated that the developmental and social interaction outcomes were predicted by different factors in the two groups; moreover, whereas 40%-60% of the variance in preterm infants' social and cognitive outcomes could be accounted for, only 15%-30% was accounted for in the full-term group. These results are discussed in terms of compensatory mechanisms that may characterize the parenting of high-risk infants, and of the applicability of transactional models of development.