Objective To evaluate associations between neonatal intensive care unit (NICU) room type (open ward and private room) and medical outcomes; neurobehavior, electrophysiology, and brain structure at hospital discharge; and developmental outcomes at 2 years of age. Study design In this prospective longitudinal cohort study, we enrolled 136 preterm infants born <30 weeks gestation from an urban, 75-bed level III NICU from 2007-2010. Upon admission, each participant was assigned to a bedspace in an open ward or private room within the same hospital, based on space and staffing availability, where they remained for the duration of hospitalization. The primary outcome was developmental performance at 2 years of age (n = 86 infants returned for testing, which was 83% of survivors) measured using the Bayley Scales of Infant and Toddler Development, 3rd Edition. Secondary outcomes were: (1) medical factors throughout the hospitalization; (2) neurobehavior; and (3) cerebral injury and maturation (determined by magnetic resonance imaging and electroencephalography). Results At term equivalent age, infants in private rooms were characterized by a diminution of normal hemispheric asymmetry and a trend toward having lower amplitude integrated electroencephalography cerebral maturation scores ( P = .02; β = −0.52 CI −0.95, −0.10). At age 2 years, infants from private rooms had lower language scores ( P = .006; β = −8.3 CI −14.2, −2.4) and a trend toward lower motor scores ( P = .02; β = −6.3 CI −11.7, −0.99), which persisted after adjustment for potential confounders. Conclusion These findings raise concerns that highlight the need for further research into the potential adverse effects of different amounts of sensory exposure in the NICU environment.