The critically ill neonate with a surgical condition requires transfer to an operating room (OR), a process which may be associated with significant morbidity. In an effort to reduce such morbidity, we performed surgery on critically ill neonates in a designated area of our neonatal intensive care unit (NICU) over the past 4 years and have compared the outcome for infants operated on within the NICU with infants operated on in the OR over the same period. There were 81 procedures performed in the NICU compared with 112 in the OR. Infants operated on in the NICU had lower birthweights (1,758 g v 2,457 g), lower gestational ages (31.3 weeks v 35.8 weeks), and lower presurgical weights (2,118 g v 2,922 g) (all P < .0001). In addition, infants operated on in the NICU had a greater severity of illness with 78% requiring mechanical ventilation versus 26% for the OR group (P < .0001) with a higher presurgical FiO2 (.43 v .31, P = .005), and a higher presurgical mean airway pressure (8.0 cm H2O v 6.2 cm H2O) for infants requiring mechanical ventilation. The overall mortality was higher in the NICU group (14% v 2%), reflecting their underlying prematurity, illness, and anomalies. There was only one surgically related death, which occurred in the NICU group. There was no significant difference in culture-proven sepsis, length of surgery, change in weight, temperature, blood pressure, heart rate, FiO2, mean airway pressure, or oxygen index associated with surgery, but there was a significantly higher incidence of hyperthermia with a temperature of greater than 37.5 degrees C in the OR group (17.8% v 3.7%, P = .002). Our experience suggests that surgical procedures can be performed in the NICU for the unstable critically ill neonate with a morbidity comparable to that seen in the OR. Further experience is needed to compare the risks and benefits of this approach.