Objective: The objective of this study was to assess effect of maternal near miss on neonatal mortality. Methods: Prospective cohort study was conducted on 384 pregnant women who came for delivery to purposely selected hospitals. The cohort was made up of 128 exposed (near miss) mothers and 256 non-exposed (non-near-miss) mothers. Women who came for delivery were only included. Those who came for services other than delivery such as abortion care, women who developed life-threatening condition not related to delivery, and those who come from no phone network area were excluded. A purposive sampling technique was used by including all mothers with near miss consecutively until the required sample size was obtained. Two non-near-miss mothers were selected using lottery for every near-miss mother. Survival analysis was done for both groups using Cox regression to look for effect of maternal near miss on neonatal mortality. Verbal informed consent from study participants was obtained. Results: A total of 354 (118 with near miss and 236 without near miss) women completed the follow-up time, yielding response rate of 92.2%. Of all, 55 (15.5%) of them have previous history of abortion, 44 (12.4%) were admitted to the intensive care unit during delivery, and 22 (6.2%) have history of past delivery of still birth. Severe preeclampsia with intensive care unit admission and severe anemia with transfusion of greater than 2 units of blood were common complications leading to maternal near miss. There were 17 (48 per 1000 live birth) neonatal death at the end of the study, of which 15 occurred among mothers with near miss. Monthly income (adjusted hazard ratio = 998, 95% confidence interval = 0.996–0.999), fetal presentation (adjusted hazard ratio = 6.48, 95% confidence interval = 1.84–22.73), APGAR score (adjusted hazard ratio = 0.746, 95% confidence interval = 0.620–0.898), and being near miss mother (adjusted hazard ratio = 8.40, 95% confidence interval = 1.638–43.118) were significantly affecting neonatal mortality. Conclusion: Maternal near miss and other fetal and general maternal characteristics have effect on occurrence of neonatal mortality. Therefore, due attention should be given to these factors for improvement of neonatal survival.