The aims of this study were to investigate regional white matter microstructural differences between very preterm (VPT) (<30 weeks' gestational age and/or <1250 g) and full term (FT) (≥37 weeks' gestational age) infants at term corrected age with diffusion tensor imaging, and to explore perinatal predictors of diffusion measures, and the relationship between regional diffusion measures and neurodevelopmental outcomes at age 7 years in VPT children. Mean (MD) (p = .003), axial (AD) (p = .008), and radial diffusivity (RD) (p = .003) in total white matter were increased in VPT compared with FT infants, with similar fractional anisotropy (FA) in the two groups. There was little evidence that group-wise differences were specific to any of the 8 regions studied for each hemisphere. Perinatal white matter abnormality and intraventricular hemorrhage (grade III or IV) were associated with increased diffusivity in the white matter of VPT infants. Higher white matter diffusivity measures of the inferior occipital and cerebellar region at term-equivalent age were associated with increased risk of impairments in motor and executive function at 7 years in VPT children, but there was little evidence for associations with IQ or memory impairment. In conclusion, myelination is likely disrupted or delayed in VPT infants, especially those with perinatal brain abnormality (BA). Altered diffusivity at term-equivalent age helps explain impaired functioning at 7 years. This study defines the nature of microstructural alterations in VPT infant white matter, assists in understanding the associated risk factors, and is the first study to reveal an important link between inferior occipital and cerebellar white matter disorganization in infancy, and executive and motor functioning 7 years later.