Incidence of neonatal sepsis in a study carried out among hospital born babies was found to be 5.3 per cent significantly high (10.9%) amongst low birth weight compared to (3.1%) normal birth weight babies. Sepsis related mortality also exceeded significantly in low birth weight babies. Positive cultures were obtained in 36.7 per cent of babies with sepsis. The organisms identified were Staphylococcus pyogenes (40%), E. coli (27.5%), Klebsiella spp. (15%), Staphylococcus epidermidis (10%) and Enterobacter spp. (7.5%). Gram negative bacilli predominated in early onset (< 72 hrs. of life) and gram positive cocci in late onset. Mortality with early onset culture positive neonatal sepsis was significantly high compared to late onset. The bacterial isolates obtained were found to be resistant to routinely used antibiotics (penicillin, ampicillin and gentamycin). Third generation cephalosporins and aminoglycosides (netilmycin) were found to be effective in treatment of neonatal sepsis.