This study examines the relationships between neonatal sleep respiratory instability and infant development. A group of 122 full-term healthy infants was observed during a nap within the first and fourth weeks of life. During each nap, a continuous polygraphic recording was obtained of respiratory activity and extraocular movements. The relative frequency and average duration of apneic pauses (greater than or equal to 2 sec) in each testing session for an infant were employed to calculate a measure of respiratory instability (PSA4) previously found to be related to the occurrence of prolonged sleep apnea. 28 of the infants in this study were maintained at home on apnea monitors. The Bayley Scales of Infant Development were administered to each infant at approximately 9 months of age. Comparisons of infants with high versus low PSA4 values and of monitored versus unmonitored infants were not strongly distorted by imbalances in birth weight, sex, race, birth order, method of feeding, Sudden Infant Death Syndrome (SIDS) sibship, parental education, age at developmental assessment, and developmental tester. Those with increased respiratory instability (PSA4 greater than or equal to -0.04) within the first week of life averaged significantly lower in mental and psychomotor development. Utilization of home apnea monitors was not significantly associated with developmental scores.