Introduction According to the thrifty (Barker's) phenotype hypothesis, poor nutrition in fetal and early infancy plays a role in the development and function of the beta cells of the islets of Langerhans, which leads to the development of type 2 diabetes mellitus. Insulin resistance is due to decreased suppressive effect of insulin on hepatic glucose production. Thus, elevated insulin levels during perinatal life may predispose the infant to the development of diabetes mellitus in future life. Intrauterine undernutrition plays an important role in causing adult insulin resistance and diabetes but the exact cause is still unknown. Preterm infants born small for gestational age (SGA) show lower adrenocortical response to stimulation due to an immature hypothalamic-pituitary axis. Methods The cross-sectional study conducted at Rajendra Institute of Medical Sciences, Ranchi from June 2020 to November 2021 included 216 newborns enrolled as per the inclusion and exclusion criteria. Maternal and neonatal details were collected at birth and recorded. Cord blood samples for measurement of serum insulin, glucose, and cortisol were collected from 84 preterm and 132 term neonates. Using this information, homeostasis model assessment-insulin resistance (HOMA-IR) was calculated using a mathematical formula. Insulin resistance was defined asHOMA-IR > 2.5.Based on birth weight and gestational age, they were further categorized into SGA, appropriate for gestational age (AGA), and large for gestational age (LGA). The parametric data were presented as means ± standard deviation (SD), and nonparametric data as medians (first quartile and third quartile). The Student's (independent samples) t-test and Mann-Whitney U test were used to compare mean differences between the two groups forparametric and nonparametric data, respectively. The Spearman correlation coefficient was used to determine the significant association between variables. Results Umbilical cord plasma glucose and serum insulin were high in preterm in comparison to term newborns. Serum cortisol levels were high in term than in preterm newborns. HOMA-IR showed a very strong positive correlation with serum insulin and a moderate positive correlation with serum glucose. HOMA-IR showed a strong negative correlation with gestational age and a moderate negative correlation with birth weight. Insulin resistance was seen in 34 preterm newborns and two term newborns. Insulin resistancewas seen in 29.8% (n = 25) of SGA preterm babies, 7.1% (n = 6) of AGA preterm babies, and 1.5% (n = 2) of AGA term newborns. A total of 55.6% of newborns were below normal weight (48.1% had low birth weight, 4.6% had very low birth weight, and 2.8% had extremelylow birth weight). Conclusion Our study suggests that preterm newborns are more insulin resistant at birth than term newborns. SGA preterm babies are having a higher incidence of insulin resistance compared to AGA preterm babies. It is clear that high insulin level is needed to overcome high insulin resistance in the very early gestational period. Serum cortisol increases as gestational age and birth weight increase. Thus, serum cortisol helps in the maturation of the fetus and neonatal adaptation at birth.