Aims/Background Neonatal morbidity, including various diseases such as sepsis, cholestasis, and bronchopulmonary dysplasia (BPD), is a significant concern, especially in preterm infants. Selecting the appropriate lipid emulsion in parenteral nutrition (PN) is essential to improve clinical outcomes. This analysis aimed to assess the impact of a novel composite lipid emulsion, SMOFlipid, on neonates receiving PN. Methods A systematic review and meta-analysis of randomized controlled trials (RCTs) were conducted. We compared SMOFlipid to various other lipid emulsions in PN received by infants. Research findings that addressed outcomes such as mortality, sepsis, cholestasis, necrotizing enterocolitis (NEC), BPD, patent ductus arteriosus (PDA), retinopathy of prematurity (ROP), intraventricular hemorrhage (IVH), and length of hospital stay were included. Subgroup analyses were conducted based on gestational age (GA). Twenty RCTs involving 1904 neonates were included. Results Compared to other lipid emulsions, SMOFlipid significantly reduced the cholestasis risk (risk ratio (RR): 0.65, 95% confidence interval (CI): 0.48–0.87, p = 0.004, I2 = 0%). However, the incidence related to IVH, BPD, ROP, NEC, and PDA (excluding an infant subgroup with GA <28 weeks), mortality, sepsis, and duration of hospital stay did not exhibit any substantial variations. The subgroup analysis indicated a decline in PDA incidence (RR: 0.88, 95% CI: 0.79–0.99, p = 0.04, I2 = 0%) among extremely premature infants receiving SMOFlipid. Conclusion SMOFlipid offers a promising option for neonatal PN, particularly for reducing cholestasis in preterm infants and PDA in extremely premature infants. Further investigations into its comprehensive benefits and long-term effects are warranted.