Septicemia is a leading cause of death among neonates in low-income settings, a situation that is deteriorating due to high levels of antimicrobial resistance. Novel interventions are urgently needed. Iron stimulates the growth of most bacteria and hypoferremia induced by the acute phase response is a key element of innate immunity. Cord blood, which has high levels of hemoglobin, iron and transferrin saturation, has hitherto been used as a proxy for the iron status of neonates. We investigated hepcidin-mediated redistribution of iron in the immediate post-natal period and tested the effect of the observed hypoferremia on the growth of pathogens frequently associated with neonatal sepsis. Healthy, vaginally delivered neonates were enrolled in a cohort study at a single center in rural Gambia (N = 120). Cord blood and two further blood samples up to 96 hours of age were analyzed for markers of iron metabolism. Samples pooled by transferrin saturation were used to conduct ex-vivo growth assays with Staphylococcus aureus, Streptococcus agalactiae, Escherichia coli and Klebsiella pneumonia. A profound reduction in transferrin saturation occurred within the first 12 h of life, from high mean levels in cord blood (47.6% (95% CI 43.7–51.5%)) to levels at the lower end of the normal reference range by 24 h of age (24.4% (21.2–27.6%)). These levels remained suppressed to 48 h of age with some recovery by 96 h. Reductions in serum iron were associated with high hepcidin and IL-6 levels. Ex-vivo growth of all sentinel pathogens was strongly associated with serum transferrin saturation. These results suggest the possibility that the hypoferremia could be augmented (e.g. by mini-hepcidins) as a novel therapeutic option that would not be vulnerable to antimicrobial resistance. Trial registration: The original trial in which this study was nested is registered at ISRCTN, number 93854442.