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Plasticity is an intrinsic property of the central nervous system, reflecting its capacity to respond in a dynamic manner to the environment and experience via modification of neural circuitry. In the context of healthy development, plasticity is considered beneficial, facilitating adaptive change in response to environmental stimuli and enrichment, with research documenting establishment of new neural connections and modification to the mapping between neural activity and behaviour. Less is known about the impact of this plasticity in the context of the young, injured brain. This review seeks to explore plasticity processes in the context of early brain insult, taking into account historical perspectives and building on recent advances in knowledge regarding ongoing development and recovery following early brain insult, with a major emphasis on neurobehavioural domains. We were particularly interested to explore the way in which plasticity processes respond to early brain insult, the implications for functional recovery and how this literature contributes to the debate between localization of brain function and neural network models. To this end we have provided an overview of normal brain development, followed by a description of the biological mechanisms associated with the most common childhood brain insults, in order to explore an evidence base for considering the competing theoretical perspectives of early plasticity and early vulnerability. We then detail these theories and the way in which they contribute to our understanding of the consequences of early brain insult. Finally, we examine evidence that considers key factors (e.g. insult severity, age at insult, environment) that may act, either independently or synergistically, to influence recovery processes and ultimate outcome. We conclude that neither plasticity nor vulnerability theories are able to explain the range of functional outcomes from early brain insult. Rather, they represent extremes along a 'recovery continuum'. Where a child's outcome falls along this continuum depends on injury factors (severity, nature, age) and environmental influences (family, sociodemographic factors, interventions).