While effects of institutional care on behavioral development have been studied extensively, effects on neural systems underlying these socioemotional and attention deficits are only beginning to be examined. The current study assessed electroencephalogram (EEG) power in 18-month-old internationally adopted, postinstitutionalized children (n = 37) and comparison groups of nonadopted children (n = 47) and children internationally adopted from foster care (n = 39). For their age, postinstitutionalized children had an atypical EEG power distribution, with relative power concentrated in lower frequency bands compared with nonadopted children. Both internationally adopted groups had lower absolute alpha power than nonadopted children. EEG power was not related to growth at adoption or to global cognitive ability. Atypical EEG power distribution at 18 months predicted indiscriminate friendliness and poorer inhibitory control at 36 months. Both postinstitutionalized and foster care children were more likely than nonadopted children to exhibit indiscriminate friendliness. Results are consistent with a cortical hypoactivation model of the effects of early deprivation on neural development and provide initial evidence associating this atypical EEG pattern with indiscriminate friendliness. Outcomes observed in the foster care children raise questions about the specificity of institutional rearing as a risk factor and emphasize the need for broader consideration of the effects of early deprivation and disruptions in care. (Contains 2 figures and 4 tables.)