Segmentation and reconstruction of cortical surfaces from magnetic resonance (MR) images are more challenging for developing neonates than adults. This is mainly due to the dynamic changes in the contrast between gray matter (GM) and white matter (WM) in both T1- and T2-weighted images (T1w and T2w) during brain maturation. In particular in neonatal T2w images WM typically has higher signal intensity than GM. This causes mislabeled voxels during cortical segmentation, especially in the cortical regions of the brain and in particular at the interface between GM and cerebrospinal fluid (CSF). We propose an automatic segmentation algorithm detecting these mislabeled voxels and correcting errors caused by partial volume effects. Our results show that the proposed algorithm corrects errors in the segmentation of both GM and WM compared to the classic expectation maximization (EM) scheme. Quantitative validation against manual segmentation demonstrates good performance (the mean Dice value: 0.758 ± 0.037 for GM and 0.794 ± 0.078 for WM). The inner, central and outer cortical surfaces are then reconstructed using implicit surface evolution. A landmark study is performed to verify the accuracy of the reconstructed cortex (the mean surface reconstruction error: 0.73 mm for inner surface and 0.63 mm for the outer). Both segmentation and reconstruction have been tested on 25 neonates with the gestational ages ranging from  27 to 45 weeks. This preliminary analysis confirms previous findings that cortical surface area and curvature increase with age, and that surface area scales to cerebral volume according to a power law, while cortical thickness is not related to age or brain growth.