Background: Neonatal sepsis is a major cause of morbidity and mortality in the neonatal period. Clinical manifestations range from subclinical infection to severe manifestations of focal or systemic disease septic shock. A suitable, economic, sensitive and specific endogenous marker is crucially needed to detect sepsis at an early stage. Objectives: We aimed to identify whether ischemia modified albumin (IMA) level can be used as a marker in the diagnosis of neonatal sepsis and evaluate its prognostic significance. Patients and Methods: A case control study was conducted on 36 newborn babies (18 with neonatal sepsis and 18 without sepsis based on blood culture). Babies were subjected to full medical history, thorough clinical examination and routine laboratory investigations according to our local standards. Serum ischemia modified albumin was measured and correlated to clinical symptoms and prognosis. Results: There was a significant difference between sepsis group and control group as regards mean serum IMA level (103.7± 31.82 versus 85.36 ± 14.07 ng/ ml) with positive predictive value 80% and negative predictive value 65%. Conclusion: We concluded that IMA seems to be a useful biomarker for the diagnosis of neonatal sepsis.