The purpose of this study was to evaluate a group of children treated with Pavlik harness for developmental dysplasia of the hip (DDH) to determine early ultrasound characteristics that predict poor acetabular development after walking age. From a group of 487 infants with DDH, 55 met inclusion criteria of (1) ultrasound documentation of major neonatal hip instability, (2) treatment with Pavlik harness, and (3) a minimum of 4 years of follow-up. These 55 infants had 100 abnormal hips. Harness treatment alone was successful in treating 87 of 100 hips. Persistent or late acetabular dysplasia was defined from serial radiographs. At a mean follow-up of 5.3 years, 5 of the 87 (6%) were found to have sequelae (late acetabular dysplasia, avascular necrosis of the femoral head, or both). Three sonographic findings present on the initial ultrasound predicted late sequelae: (1) dynamic coverage index of 22% or less, (2) alpha angle less than 43 degrees, and (3) abnormal echogenicity of the cartilaginous roof on initial ultrasound. Abnormal echogenicity was the most specific single predictor of residual dysplasia (sensitivity 100% and specificity 88%). The structurally normal cartilaginous roof is non-echogenic except for a short triangular fibrous tip (the labrum). Pathologic cartilage becomes echogenic beyond the tip as hyaline cartilage becomes fibrous and deformed. In unstable hips that respond well to Pavlik harness treatment, it would appear that midterm acetabular development can be affected when early transformation of roof cartilage accompanies displacement and instability.