Opioid tolerance and withdrawal have been challenges for decades. The neurochemical mechanisms of tolerance and dependence are clinically important only because they can affect weaning schedules and the adjustment of doses for neonates. Analgesic effects are characterized by an increased depolarization threshold for the neuron, shorter duration of the action potential generated, and reduced release of neurotransmitters. Tolerance and withdrawal are associated with the reversal of these cellular effects. Adverse clinical effects associated with the use of opioids in neonates include respiratory depression, chest wall rigidity, urinary retention, and decreased gastrointestinal motility. The physiological systems most prominently affected by opioid withdrawal include the central nervous system, gastrointestinal system, and the autonomic nervous system. Opioid withdrawal symptoms in neonates can be assessed by using easily available scoring systems, although these need to be validated for different populations. Management of opioid withdrawal includes the use of other opioids, benzodiazepines and alpha-2 adrenergic receptor antagonist, clonidine. Careful titration of opioids with attention given to appropriate weaning schedules can reduce the incidence of withdrawal in neonates.