Objectives: Although neonatal near miss is an emerging concept and a tool for improving neonatal care, its magnitude and associated factors are less researched in Ethiopia. Thus, this study was aimed to uncover the magnitude of neonatal near miss and its associated factors in public hospitals in Eastern Ethiopia. Methods: A facility-based cross-sectional study was employed on a randomly selected 405 mother–neonate pairs. An interview using a structured questionnaire accompanied by review of medical records was used to collect data from the mothers and records of the neonates. Neonatal near miss was defined as having any of the pragmatic (gestational age < 33 weeks, birth weight < 1750 g, and fifth minutes Apgar score < 7) or management criteria. Crude and adjusted logistic regression analysis was done to identify associated factors and presented with adjusted odds ratio with 95% confidence interval. Results: Of 401 mother–neonate pairs included in the study, 126 (31.4%, 95% confidence interval = [26.9, 36.2]) neonates had at least one neonatal near miss event at discharge. Neonatal near miss was more likely among neonates from referred women (adjusted odds ratio = 2.24, 95% confidence interval = [1.25, 4.03]), no antenatal care (adjusted odds ratio = 2.08, 95% confidence interval = [1.10, 3.93]), antepartum hemorrhage (adjusted odds ratio = 4.29, 95% confidence interval = [2.16, 8.53]), premature rupture of membrane (adjusted odds ratio = 4.07, 95% confidence interval = [2.05, 8.07]), obstructed labor (adjusted odds ratio = 2.61, 95% confidence interval = [1.23, 5.52]), non-vertex presentation (adjusted odds ratio = 3.03, 95% confidence interval = [1.54, 5.95]), and primiparous (adjusted odd ratio = 2.67, 95% confidence interval = [1.49, 4.77]). Conclusions: In this study, we found that neonatal near miss is higher than previous findings in Ethiopia. Improving neonatal near miss requires promoting antenatal care, maternal referral system, and early identification and management of obstetric complications.