Dramatic changes occur in the neonatal brain during the third trimester and first few years postnatally. The morphological, biochemical, and physiological maturation of the central nervous system is paralleled by distinct developmental changes in the EEG and evoked potentials (EPs). Although there have been few studies correlating specific developmental changes with the developmental changes in clinical neurophysiological studies, it is likely that elaboration of dendritic and axonal branches, formation of synapses, myelination, and biochemical maturation of neurons and glial cells play a key role in the remarkable changes in EEGs and EPs with age. This paper reviews major developmental changes occurring in the newborn brain from the third trimester through the first 2 years postnatally and their possible relationship to maturational changes in the EEG and EPs.