Preterm birth is a leading risk factor for neurodevelopmental and cognitive impairment in childhood and adolescence. The most common known cerebral abnormality among preterm infants at term equivalent age is a diffuse white matter abnormality seen on magnetic resonance (MR) images. It occurs with a similar prevalence to subsequent impairment, but its effect on developing neural systems is unknown. MR images were obtained at term equivalent age from 62 infants born at 24–33 completed weeks gestation and 12 term born controls. Tissue damage was quantified using diffusion-weighted imaging, and deformation-based morphometry was used to make a non-subjective survey of the whole brain to identify significant cerebral morphological alterations associated with preterm birth and with diffuse white matter injury. Preterm infants at term equivalent age had reduced thalamic and lentiform volumes without evidence of acute injury in these regions (t= 5.81,P< 0.05), and these alterations were more marked with increasing prematurity (t= 7.13,P< 0.05 for infants born at less than 28 weeks) and in infants with diffuse white matter injury (t= 6.43,P< 0.05). The identification of deep grey matter growth failure in association with diffuse white matter injury suggests that white matter injury is not an isolated phenomenon, but rather, it is associated with the maldevelopment of remote structures. This could be mediated by a disturbance to corticothalamic connectivity during a critical period in cerebral development. Deformation-based morphometry is a powerful tool for modelling the developing brain in health and disease, and can be used to test putative aetiological factors for injury.