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Exposure to early psychosocial deprivation as a result of institutional care disrupts typical brain development. The Bucharest Early Intervention Project (BEIP) is the first longitudinal study to investigate the neurodevelopment of institutionalized infants randomized to a foster care (FCG) intervention versus care as usual (CAUG). Here, we present findings from a follow‐up assessment of brain electrical activity as indexed by resting EEG at age 16 years. In addition, we examined the effects of disruption of foster care placement (e.g. the number of moves among foster care placements) on brain electrical activity. Resting‐state EEG was collected from 48 CAUG, 46 FCG and 48 never institutionalized (NIG) control participants. Absolute (µV2) and relative (proportion) power were computed from eyes closed, resting EEG data for theta, alpha and beta frequency bands. The CAUG displayed higher relative theta and lower relative alpha power compared to the FCG at 16 years of age. The FCG showed brain activity comparable to the NIG. The results further showed that disruptions following the original foster care placement had an adverse effect on brain electrical activity. Within the foster care group, there were no effects of age of placement on EEG power. Placement of children who have experienced early institutional rearing into stable foster care settings ensure long‐term improvement in brain functioning. [ABSTRACT FROM AUTHOR]