Sleep architecture carries important information about brain health. Here we show that active compared to quiet sleep in infants heralds a marked change from long- to short-range functional connectivity across broad-frequency neural activity. This change in cortical connectivity is attenuated following preterm birth and pre-empts visual performance at two years. Biophysical modeling shows that active sleep is defined by reduced energy in a large-scale, uniform mode of spatiotemporal neural activity and increased energy in two non-uniform anteroposterior modes. This distinct energy redistribution leads to the emergence of more complex connectivity patterns in active sleep compared to quiet sleep. Preterm-born infants show an attenuation in this sleep-related reorganization of connectivity that carries novel prognostic information.