The case records of all neonates admitted to the neonatal unit at Aga Khan University Hospital (Karachi) in a 30 month period (Nov. 86-April 89) were analysed. Of 60 neonates with confirmed sepsis, 33 (55%) had non-nosocomial infection (NNC) whereas 27 (45%) had nosocomial sepsis (NC). The most common organisms causing early-onset NNC sepsis were Klebsiella species (53%) and Escherichia coli (10%), whereas the organisms causing late-onset NNC sepsis included Salmonella parathypi (21%), Group A Streptococcus (21%), Escherichia coli (14%) and Pseudomonas species (14%). Klebsiella was the most common organism causing NC sepsis, others being Staphylococcus aureus (15%) and Serratia species (15%). The mortality in NC sepsis, early-onset and late onset NNC sepsis was 44%, 26% and 43%, respectively. Risk factors associated with NNC sepsis included low birthweight, prematurity and prolonged and complicated deliveries. There was a high incidence of drug resistance to ampicillin and gentamicin among gram-negative organisms causing sepsis (mean 67%).