Background Although under-5 mortality has decreased in the last two decades, neonatal mortality remains a global health challenge. Despite achieving notable progress, Ethiopia has still one of the highest neonatal mortality rates worldwide. We aimed to assess the risk factors for mortality among neonates admitted to a special care unit in a referral hospital in rural Ethiopia. Methods This was a retrospective observational study including all 4182 neonates admitted to the special care unit of the St. Luke Wolisso Hospital (Ethiopia) from January 2014 to December 2017. Data were retrieved from hospital charts and entered in an anonymized dataset. A logistic regression model was applied to identify predictors of mortality and effect sizes were expressed as odds ratios with 95% confidence intervals. Results Proportion of deaths was 17% (709/4182 neonates). Neonates referred from other health facilities or home (odds ratio 1.52, 95% confidence interval 1.21 to 1.91), moderate hypothermia at admission (odds ratio 1.53, 95% confidence interval 1.09 to 2.15) and diagnosis of late-onset sepsis (odds ratio 1.63, 95% confidence interval 1.12 to 2.36), low birthweight (odds ratio 2.48, 95% confidence interval 2.00 to 3.09), very low birthweight (odds ratio 11.71, 95% confidence interval 8.63 to 15.94), extremely low birthweight (odds ratio 76.04, 95% confidence interval 28.54 to 263.82), intrapartum-related complications (odds ratio 4.69, 95% confidence interval 3.55 to 6.20), meconium aspiration syndrome (odds ratio 2.34, 95% confidence interval 1.15 to 4.43), respiratory distress (odds ratio 2.25, 95% confidence interval 1.72 to 2.95), other infections (odds ratio 1.92, 95% confidence interval 1.31 to 2.81) or malformations (odds ratio 2.32, 95% confidence interval 1.49 to 3.57) were associated with increased mortality. Being admitted in 2017 vs. 2014 (odds ratio 0.71, 95% confidence interval 0.52 to 0.97), and older age at admission (odds ratio 0.95, 95% confidence interval 0.93 to 0.97) were associated with decreased likelihood of mortality. Conclusions The majority of neonatal deaths was associated with preventable and treatable conditions. Education on neonatal resuscitation and postnatal management, and the introduction of an on-call doctor for high-risk deliveries might have contributed to the reduction in neonatal mortality over time.