Background:  Brainstem Auditory Evoked Potentials (BAEP) serves an important role in paediatric practice for assessment of auditory function in a child whose hearing cannot be tested behaviorally and evaluating auditory pathways of the brainstem. Objectives This study aims to compare wave I and wave III latencies by Brainstem Auditory Evoked Potential (BAEP) in preterm babies (32weeks to 36 weeks) with age specific normal response for identification of hearing impairment if any. Material and methods: The study was done on 50 preterm newborn who were subdivided into 3 groups on the basis of gestational age Group A: 32 weeks (n=12), Group B: 34 weeks (n= 18), Group C: 36 weeks (n=20). Babies were subjected to BAEP test on RMS EMG EP MARK-II machine in the neurophysiology unit of Department of Physiology, Gandhi medical college, Bhopal. Interpretation of the data as compared to normal values was done. Results and conclusion:  Increase in absolute peak latencies of wave I and III in preterm babies was observed as compared to normal term indicating defect in peripheral transmission and improper myelination of BAEP pathway. Inter-group comparison of group 1 with group 2 and group 3 revealed significant difference in the absolute latencies of the waves I and III of both ears. Significant difference in latency of waves I and III of right ear in group 2 and group 3 was present.