Background. Neonatal hypoxic-ischemic (HI) injury has been considered to have acute and long term deleterious effects on many tissues, including the peripheral nerve. Objectives. In this study, the effects of a tumor necrosis factor-alpha (TNF-α) inhibitor (etanercept) on peripheral nerve damage and the ultrastructure of the sciatic nerve and gastrocnemius muscle in rats exposed to HI during the neonatal period were examined. Material and Methods. In this study, 45 seven-day-old rats were used and they were divided into three groups. The right carotid arteries of the rats in the saline and etanercept groups were ligated and put in a hypoxia chamber containing 8% oxygen for two hours. Just after hypoxia, the etanercept group was given 10 mg/kg etanercept, but the saline group had only saline intraperitoneally. The sham group rats' carotid arteries were not ligated or put in hypoxia. The amplitude, area and latency of sciatic nerve compound motor action potential (CMAP), which mainly reflects axonopathy and myelinopathy, were measured using standard techniques in the seventeenth week following the HI. Sciatic nerve and gastrocnemius muscle were evaluated with a transmission electron microscope, and grading for myelin sheath damage was done to all groups. Results. Neuropathy was seen in rats after HI. While treatment with etanercept showed a protective effect for the axons of sciatic nerve, demyelination could not be recovered with etanercept. Conclusions. This study is the first in literature to show a partial interruption of the signal through the peripheral nerve fibers caused by axonal and myelin dysfunction continuation in rats exposed to HI after birth, in the 17