Urbanization is rapidly spreading throughout the developing world. An urban slum poses special health problems due to poverty, overcrowding, unhygienic surroundings and lack of an organized health Infrastructure. The primary causes of neonatal mortality are sepsis, perinatal asphyxia and prematurity. Home deliveries, late recognition of neonatal illness, delay in seeking medical help and inappropriate treatment contribute to neonatal mortality. Measures to reduce neonatal mortality in urban slums should focus on health education, improvement of antenatal practices, institutional deliveries, and ensuring quality perinatal care. Success of a comprehensive health strategy would require planned health infrastructure, strengthening and unification of existing health care program and facilities; forming a system of referral and developing a program with active participation of the community.