Background and Purpose— We evaluate white matter (WM) injury after hypoxic-ischemic (HI) insult in a neonatal rat model using diffusion tensor imaging (DTI) to determine whether λ _∥ and λ _⊥ are able to characterize type and severity of brain damage. Methods— Eighteen 7-day-old Sprague-Dawley rats underwent unilateral ligation of left common carotid artery followed by 50 minutes (n=9) or 90 minutes (n=9) of hypoxia at 37°C. Rats were divided into 2 groups, according to absence (group A, n=11) or presence (group B, n=7) of cystic lesions on D7 post-HI T2-weighted imaging. DTI was performed for all rats at D1 and for group A rats at D7 post-HI. Signal intensity of ipsilateral and contralateral external capsule (EC) on D1 was compared by paired t test, with histological correlation. Results— Group A rats had significantly reduced FA, elevated trace, elevated λ _⊥, and similar λ _∥ on D1 in the ipsilateral compared to contralateral EC, whereas group B rats had significant reduction in all parameters in the ipsilateral EC. Elevated trace normalized on D7 in group A rats. Histopathologic results demonstrated reduced myelination in group A noncystic HI and severe necrosis in group B cystic HI. Conclusions— Increased λ _⊥ with no significant change in λ _∥ appears to characterize noncystic WM injury with reduced myelination, whereas reduction in both λ _∥ and λ _⊥ characterize severe damage with loss of structural integrity and necrosis. Combining with FA and trace, λ _∥ and λ _⊥ provide additional information which reflects type and severity of HI injury.