Background: Pneumothorax (PTX) is a common complication and potentially life threatening condition for neonates in the neonatal intensive care unit (NICU). The use of ventilatory support and neonatal resuscitation procedures with positive pressure is deemed necessary. Aim of work: The aim of this study is to identify the risk factors which predispose or relate to pneumothorax in neonates admitted in NICU of AL-Azhar Assuit University Hospital and the outcome of this problem. Patients and Methods: This is a retrospective descriptive study was carried out on mechanically ventilated neonates admitted to NICU of AL-Azhar Assuit University Hospital during the period from 1^st January  2018 to 1^st January 2020. Results: On studying the demographic and clinical characteristics of cases and risk factors implicated in incidence of pneumothorax, it's reported that 41.7% of cases were males, 75% born by caesarean section, most of cases with gestational age < 34 weeks, with birth weight < 2 kilogram. Respiratory distress syndrome (RDS) was the most prevalent underlying lung disease, as 75% of pneumothorax patients were having RDS, probably being the most common cause of admission and need for ventilatory support. During admission, 4 patients died with mortality rate 33.3% of all patients presenting with pneumothorax. Conclusion:The incidence of PTX was high due to positive pressure ventilation. It was higher in neonates on synchronized intermittent mechanical ventilation (SIMV) than on continuous positive airway pressure (CPAP) in preterm infants, in those of elective CS and neonates with low birth weight. Respiratory distress syndrome was the most prevalent underlying lung disease. Mortality was high due to lower birth weight and gestational age, the need of these patients to mechanical ventilation and more severe chest condition than other patients. Recommendation:Intensive care for neonates who develop pneumothorax is necessary as they have higher mortality rates.