Background: HIE is a brain dysfunction caused by a reduction in the supply of oxygen to the brain and other organs (hypoxia), compounded by low blood flow to vital organs (ischemia). Encephalopathy refers to any condition that results from reduced blood and oxygen supply to the brain. HIE is the common cause of cerebral palsy. Cerebral palsy is defined as a group of permanent disorders of the development of movement and posture, causing activity limitation, that are due to non-progressive disturbances that occurred in the developing fetal or infant brain. Early assessment of severity of HIE can help proper parent counseling and early institution of stimulation therapy for better development of infant. So there is a necessity to study the importance of DTI in detecting HIE babies within 14 days of their life. Aims and Objectives: • To correlate MRI brain findings and DTI findings in early neonatal period of term and preterm neonates with hypoxic ischemic encephalopathy and its clinical outcome • It can provide evidence for developing effective measures of prevention, protection, and rehabilitation for damage to the brain Materials and Method:Prospective study done in 50 newborn babies with hypoxic ischemic encephalopathy under Department of Radiodiagnosis, Govt. Kilpauk Medical College Hospital, Kilpauk, Chennai for a period of 1 year and 3 monthsAll included were underwent conventional MRI sequences and Diffusion Tensor Imaging. All images were screened for any abnormality in the following 6 regions, Corona radiate, anterior and posterior limb of internal capsule, superior longitudinal fasiculus, inferior longitudinal fasiculus andthalamus. Results: DTI detected 46 babies out of 50 babies whereas MRI detected 23 out of 50 babies. Study shows DTI has 100% sensitivity and 90% specificity. DTI has a positive predictive value of 91.3% Negative predictive value of 96% and Diagnostic accuracy of 92%. Detailed ROC analysis done for DTI different segments.Conclusion: From our study we came to find out that HIE-1 mainly affects the posterior limb of internal capsule and HIE III diffusely affects the white matter, basal ganglia and thalamus. DTI is currently the only way to quantify the maturation and damage of brain development in preterm neonates. Coupled with a good intervention. Treatment system established with clinical development assessment and pathogenic factors, DTI is an important aid to improve the prognosis of nerve development in HIE babies.