Punctate white matter lesions (PWML) are common in preterm neonates. Neurodevelopmental outcome of the neonates is related to the lesion extensions. This study aimed to characterize the extent of microstructural variations for different PWML grades. White matter microstructural variations were different across PWML grades. The severe PWML were associated with extensive microstructural changes. Pattern of increased AD, increased RD, and reduced/unchanged FA was found proximal to the PWML. Unchanged AD, increased RD, and reduced/unchanged FA were observed in the vast regions distal from the PWML. These findings may help in determining outcomes of PWML and treatment strategies.