Background: This study examines relationships between neonatal white and gray matter microstructure and neurodevelopment in very preterm (VPT) infants (≤30 weeks gestation) with high-grade brain injury (BI). Methods: Term-equivalent diffusion tensor magnetic resonance imaging data were obtained in 32 VPT infants with high-grade BI spanning grade III/IV intraventricular hemorrhage, post-hemorrhagic hydrocephalus (PHH), and cystic periventricular leukomalacia (BI group); 69 VPT infants without high-grade injury (VPT group); and 55 term-born infants. The Bayley-III assessed neurodevelopmental outcomes at age 2 years. Results: BI infants had lower fractional anisotropy (FA) in the posterior limb of the internal capsule (PLIC), cingulum, and corpus callosum, and higher mean diffusivity (MD) in the optic radiations and cingulum than VPT infants. PHH was associated with higher MD in the optic radiations and left PLIC, and higher FA in the right caudate. For BI infants, higher MD in the right optic radiation and lower FA in the right cingulum, PLIC, and corpus callosum were related to motor impairments. Conclusions: BI infants demonstrated altered white and gray matter microstructure in regions affected by injury in a manner dependent upon injury type. PHH infants demonstrated the greatest impairments. Aberrant white matter microstructure was related to motor impairment in BI infants.