The thromboelastogram (TEG) measures functional defects in coagulation, from fibrin formation through platelet aggregation to fibrinolysis. It is comparable with standard laboratory tests of coagulation; however, it provides additional useful qualitative information. This prospective study documents the TEG findings in 103 neonates: 60 were normal and healthy and provided a reference range; 12 surgical babies had established sepsis, 15 had early sepsis, and 16 were non-septic. TEG abnormalities were detected only in those patients with early and established sepsis. Abnormalities were found in all but 1 of this group of 27 patients (96%), whereas only 16 (59%) had thrombocytopenia, 2 (6%) had leukocytosis, and 6 had leukopenia. The TEG had a sensitivity for sepsis of 96% and a specificity of 96%. This exceeds the values for routine full blood-count parameters and other laboratory indicators of sepsis. It was found to be a simple, quick, and sensitive indicator of early sepsis that enabled the clinicians to manage septic newborns earlier.