This study examines cell death and proliferation in the white matter after neonatal stroke. In postnatal day 7 injured rat, there was a marked reduction in myelin basic protein (MBP) immunostaining mainly corresponding to numerous pyknotic immature oligodendrocytes and TUNEL-positive astrocytes in the ipsilateral external capsule. In contrast, a substantial restoration of MBP, as indicated by the MBP ratio of left-to-right, occurred in the cingulum at 48 (1.27 ± 0.12) and 72 (1.30 ± 0.18, P < 0.05) h of recovery as compared to age-matched controls (1.03 ± 0.14). Ki-67 immunostaining revealed a first peak of newly generated cells in the dorsolateral hippocampal subventricular zone and cingulum at 72 h after reperfusion. Double immunofluorescence revealed that most of the Ki-67-positive cells were astrocytes at 48 h and NG2 pre-oligodendrocytes at 72 h of recovery. Microglia infiltration occurs over several days in the cingulum, and a huge quantity of macrophages reached the subcortical white matter where they engulfed immature oligodendrocytes. The overall results suggest that the persistent activation of microglia involves a chronic component of immunoinflammation, which overwhelms repair processes and contributes to cystic growth in the developing brain.