Neonatal sepsis was studied among one hundred neonates (50 hospital born and 50 outborn babies) over one year period. The incidence of neonatal septicaemia was 15.5 per 1000 live births in the hospital. Among outborn babies it accounted for 6.1% of total pediatric admissions and 43.7% of sick neonates referred from outside. Low birth weight and prematurity were important predisposing factors in both the groups. Blood culture was positive among 32% of outborn and 34% of inborn babies. Coagulase-negative Staphylococcus, Klebsiella and Acinetobacter were the common causative organisms. All isolated organisms were sensitive to Gentamicin whereas 75% of them were resistant to Ampicillin. Mortality among outborn neonates (32%) was much higher in comparison to (10%) hospital born babies. Early identification of high risk antenatal cases and neonates and appropriate referral can bring down mortality and morbidity from neonatal sepsis.