Background: There exists substantial evidence of the effects of maternal mental health on birth outcomes. However, the roles of (1) comorbidity between mental and physical health, and (2) familial confounding underlying this association, remain unclear. Methods: This cohort study included a random sample of 19.5% children born between January 1, 1997, through December 31, 2008, within a health maintenance organization (HMO) in Israel, as well as their parents and siblings born within the cohort years. Outcomes were ICD-9 diagnoses of neonatal adversity (birth complications and congenital anomalies), and exposure was parental mental health diagnosis - all ascertained through the HMO records. Odds ratios (ORs) and their 95% CIs for the associations between the maternal mental health diagnosis and neonatal adversity were calculated using logistic regression, iteratively adjusting for covariates (maternal age, child s year of birth, socioeconomic status, number of physical health diagnoses). We also examined potential familial confounding using a negative control approach based on paternal exposure. Results: In our sample of 74,533 children, 6,674 (9.1%) were born after birth complications and 14,569 (19.9%) with a congenital anomaly. Maternal mental health diagnosis around pregnancy was significantly associated with these measures of neonatal adversity, adjusting for demographic and socioeconomic factors (birth complications: OR=1.3 (1.2-1.4); p<0.001; congenital anomalies: OR=1.2 (1.1-1.3); p<0.001). These associations became attenuated and non-significant after further adjustment for the number of physical health diagnoses. In a joint model, maternal and paternal diagnosis of mental health disorder were independently associated with measures of neonatal adversity (birth complications: ORmat=1.3 (1.1-1.4); p < 0.001; ORpat=1.2 (1.1-1.3); p=0.004; congenital anomalies: ORmat=1.2 (1.1-1.3); p<0.001; ORpat=1.1 (1.0-1.2); p=0.01). Conclusions: Physical health comorbidities and familial factors play a role in the associations between maternal mental health and neonatal adversity.