Background: Perinatal asphyxia is one of the causes of early neonatal deaths. The objective of the study was to determine the effectiveness of intravenous magnesium sulphate infusionfor achieving a good neurological outcome and reducing the mortality and morbidity in term neonates with moderate to severe perinatal asphyxia. Methods: 108 term neonates with birth asphyxia were assigned randomly in equal numbers to either magnesium sulphate infusion (study group) and control group. Neonates in both the groups were treated according to routine NICU protocol for birth asphyxia. Study group in addition had received magnesium sulphate intravenous infusion at 250 mg/kg/dose (1 ml/kg/dose in 20 ml of 5% dextrose solution) over 1 hour within 6 hours of birth followed by 2 additional doses at 24 hours and 48 hours. Vitals were monitored continuously. Clinical and neurological assessments were done in both the groups till discharge and further assessment were done during the follow-up at 1 month and 3 months of age. Results: Each group included 54 neonates. More number of neonates in the study group had their seizures controlled by a single anticonvulsant as against the control group. In the study group 89% neonates had seizure control within 2 days as compared to 72% in the control group. There was early initiation of feed among the study group as against comparison group which was statistically significant. In study group, 43 neonates (88%) recovered from abnormal neurological examination as compared to 28 (69%) in control group (p=0.001). Infants on follow-up showed a good neurological outcome with fewer neurological impairment. Conclusions: Intravenous magnesium sulphate given within 6 hours of life to term neonates with birth asphyxia helps in early control of seizure, early establishment of full enteral feed and fewer chances of neurological abnormalities at discharge and promoting good neurological outcome on follow-up at 3 months of age.