Introduction: Neonatal sepsis is a global healthcare concern, which is more prevalent in developing countries. However, surprisingly, biomarkers with good sensitivity and specificity to predict mortality and morbidity are lacking. Higher levels of serum lactate are observed in patients exposed to an inflammatory response, but its practical use remains limited. Therefore, the author aimed to investigate the relationship between serum lactate measurements and the severity of neonatal sepsis. Aim: To assess the role of serum lactate clearance as a marker to predict mortality and morbidity in neonatal sepsis. Additionally, the secondary aim was to evaluate the demographic profile of neonatal sepsis and understand the relationship between C-reactive Protein (CRP), Procalcitonin, and lactate clearance in neonatal sepsis. Materials and Methods: A prospective cohort study was conducted in the Sick Newborn Care Unit (SNCU) and Neonatal Intensive Care Unit (NICU) of Chittaranjan Seva Sadan, College of Obstetrics, Gynaecology, and Child Health in Kolkata, India, from June 2020 to May 2021. A total of 93 confirmed cases of neonatal sepsis were included in the study. Serum lactate levels were measured at the time of sepsis diagnosis and 48 hours after the first sample. Lactate clearance was calculated, and the neonates were followed till discharge or death. Various parameters, including complete blood count, CRP, Procalcitonin, culture, and Cerebrospinal Fluid (CSF), were assessed. The data obtained were statistically analysed using paired t-test, one-way Analysis of Variance (ANOVA), and Pearson’s Chi-square test. Results: A total of 93 neonates were included after meeting the inclusion and exclusion criteria. Among them, 10 neonates died, while 83 were successfully discharged. It was found that death was significantly associated (p<0.0001) with lactate clearance. Total 9 (90%) of the deceased neonates had negative lactate clearance, while only 21 (25.3%) discharged neonates had negative lactate clearance. Lactate clearance was also significantly associated with the duration of hypoglycaemia (p=0.008), duration of Nil Per Mouth (NPM) (p=0.01), and need for reintubation (p=0.05). However, no association was found with the duration of hospital stay, duration of fluid therapy, duration of oxygen requirement, and need for ventilation. Conclusion: Lactate clearance showed a significant association with the risk of mortality in patients with neonatal sepsis. Therefore, lactate clearance can be used as a prognostic marker to identify sepsis. Early detection of sepsis can aid in proper management and subsequently reduce mortality