Objective(s) In the last few years, serum procalcitonin has been proposed as an early marker of infections in neonates, with varying results. In this study, we aimed to investigate the value of procalcitonin, and C- reactive protein in establishing the diagnosis of neonatal sepsis. Materials and Methods Blood samples were collected at admission from 69 neonates with suspected infection (admitted to the Neonatal Intensive Care Units at Alzahra and Dr Beheshti Hospital in and Fatema-Zahra in Najafabad from May 2005 to April 2006). Patients were categorized in different groups according to clinical symptoms of sepsis, bacteriological and laboratory results. Group I consisted of 20 newborns with positive blood cultures and other biological tests which suggested infection. Group II consisted of 49 neonates with negative blood cultures but had two or three of clinical signs of sepsis. The control group included 18 healthy neonates with physiological hyperbilirubinemia and no clinical and biological data of infection, referred to the hospital for bilirubin determination. Procalcitonin and C-reactive protein (CRP) were determined by immunoluminometric assay and nephlometry method respectively. Results Mean levels of procalcitonin and CRP in septic neonates (group I) were significantly higher than the other two groups (P< 0.005). Sensitivity, specificity, positive predictive value and negative predictive value were determined for all markers and compared with each other. Conclusion We conclude that procalcitonin is a better marker than CRP in the diagnosis of neonatal sepsis.