Necrotizing enterocolitis (NEC) causes approximately 4000 deaths/y and significant morbidity among U.S.-born preterm infants alone. Various combinations of inadequate tissue oxygenation, bacterial overgrowth, and enteral feeding with immaturity may cause the initial damage to intestinal mucosa that culminates in necrosis. Presently, there is not a way to predict the onset of the disease or to prevent its occurrence. As part of risk-benefit assessment, we compared disease in hospitalized preterm infants fed a commercial (control) preterm formula or an experimental formula with egg phospholipids for a randomized, double-masked, clinical study of diet and infant neurodevelopment. Infants fed the experimental formula developed significantly less stage II and III NEC compared with infants fed the control formula (2.9 versus 17.6%, p < 0.05), but had similar rates of bronchopulmonary dysplasia (23.4 versus 23.5%), septicemia (26 versus 31%), and retinopathy of prematurity (38 versus 40%). Compared with the control formula, the experimental formula provided 7-fold more esterified choline, arachidonic acid (AA, 0.4% of total fatty acids), and docosahexaenoic acid (0.13%). Phospholipids are constituents of mucosal membranes and intestinal surfactant, and their components, AA and choline, are substrates for intestinal vasodilatory and cytoprotective eicosanoids (AA) and the vasodilatory neurotransmitter, acetylcholine (choline), respectively. One or more of these components of egg phospholipids may have enhanced one or more immature intestinal functions to lower the incidence of NEC in this study. Regardless of the potential mechanism, a larger randomized trial designed to test the effect of this egg phospholipid-containing formula on NEC seems warranted.