Back ground: Ventriculoperitoneal (VP) shunt is one of the most commonly performed procedures by a neurosurgeon. It is occasionally fraught with the most bizarre complications . Shunt infection in hydrocephalus patients  is the  most important complication and causes a severe, even life-threatening complication. Objectives: To evaluate outcome of insertion of antibiotic impregnated shunt (AIS) catheter compared to non-AIS catheter for treatment hydrocephalus (HCP) in neonates. Patients & Methods: Prospective part of the study (Group A) included 50 patients fulfilling the    diagnostic criteria for HCP and assigned to receive AIS catheter. The retrospective part included 50  n patients age- and gender-matched patients underwent non-AIS catheter for treatment of HCP. Study outcomes included rates of catheter-related infection (CRI) and revision surgery (RS) for CRI. Results: Sixteen patients required RS for CRI; 3 in group A and 13 in group B with significantly lower frequency in group A. Frequency of patients required early RS  was significantly lower (p < 0.001) and mean duration till development of the 1^st CRI was significantly (p=0.019) longer in group A. Frequency of patients required frequent revision was significantly (p=0.001) lower in group A. Collectively, there were 25 episodes of CRI with significantly lower frequency in group A (p=0.001). Mean number of local CRI findings/patient was significantly (p=0.019) lower and duration of symptoms before diagnosis of CRI was significantly (p=0.02) longer in group A. Thirteen patients showed high leucocytic count, 12 patients had low CSF glucose/serum glucose and  7 patients showed high CSF lactate concentration. Bacteriological examination of replaced catheters showed significantly higher frequency of no bacterial growth in group A, the frequency of catheters positive culture for gram-positive cocci and gram-negative bacilli were significantly lower in group A. Conclusion: AIS catheter allowed significant reduction of CRI and RS rates. CRI rate showed negative significant correlation with age at time of primary surgery.