The clinical manifestations of neonatal sepsis are nonspecific and have varied clinical features. The various manifestation includes decreased acceptance of feed, respiratory distress, pneumonia, apnea, delayed capillary refill time, cold peripheries, mottling, cyanosis, feed intolerance, necrotizing enterocolitis, temperature instability including hypothermia and hyperthermia, hypotonia, seizures, bulging fontanels, disseminated intravascular coagulation (DIC), bleeding manifestation, and prolonged jaundice. This was hospital based prospective observational study undertaken to study the early neurological outcome in term neonates who survived septic shock at the time of discharge and at 3 months of age. A total of 51 term neonates who met the inclusion and exclusion criteria were studied. Among the 51 neonates 2 neonates had developed sclerema, and 2 had convulsion during hospital stay and these neonates had moderate neurological impairment at 3 months of age and this association was statistically significant. Septic shock remains a major challenge in the NICU. Severe neurologic sequelae were not seen however moderate impairment was seen in our study.