Ninety-four healthy full-term and preterm infants, who differed because of immaturity, not medical or social risk factors, were assessed at 3 and 24 months of age. Preterm infants scored significantly lower on the Bayley Mental Development Index (MDI), but not the Psychomotor Development Index (PDI) compared with full-term infants at 24 months (age corrected for prematurity). Nine factors, which included a combination of environmental and infant temperament variables, accounted for 36% of the variance in MDI scores. Separate regression analyses by infant group found that the caregiving environment, Home Observation for the Measurement of the Environment (HOME total score), contributed more to the variance in preterm than full-term development, despite the fact that the HOME scores were high and did not differ between groups at 2 years of age. These findings provide further evidence of the need to continue developmental follow-up for healthy low birth weight (LBW) preterm infants and of the important influence of early caregiving factors on later development, even for middle-class, LBW preterm infants.