A full-term, small-for-gestational-age, neonate was born 4 days after rupture of the membranes. On the 5th day of life, she developed sepsis due to Klebsiella pneumoniae. On the 18th day of life, the right hip was noted swollen with limited range of motion, but it was painless on passive movements. Ultrasonography revealed abscess of the right ilio-psoas muscle with normal appearance of the right hip joint. Surgical incision and drainage and antibiotic administration resulted in a gradual full recovery. Ultrasonography can confirm the diagnosis of this exceptional clinical entity in neonates, which is difficult to differentiate from septic arthritis of the hip.