To evaluate the association between the spatial distribution of neonatal mortality and living conditions, and to analyze trends in the social inequalities, related to this mortality, in Salvador, Bahia, Brazil, 2000 - 2006. The city's Information Zones, the unit of analysis used in this study, were grouped into strata reflecting high, intermediate, low and very low living conditions, based on a living conditions index (LCI). Neonatal mortality rates were calculated for each stratum. Spearman's correlation, linear regression and relative risks were used in the data analysis. Neonatal mortality in Salvador was found to be associated with living conditions, with risks of 53, 56 and 59% greater, respectively, in the intermediate, low and very low strata, when compared to the high living conditions stratum. Only the intermediate living conditions stratum shows a significant decline in neonatal mortality (β = -0.93; p = 0.039). In the stratum of high living conditions, it was observed a stagnation of this mortality. Poorer living conditions were associated to higher risks of neonatal mortality. The slight decline in social inequalities, found in neonatal mortality, was due to a decline in the intermediate living conditions stratum. Although dependent on the access to quality healthcare services and life support technologies, a more consistent reduction in the neonatal mortality and its associated inequalities will only be achieved when broader-reaching public policies are implemented, improving the living conditions, and mainly focusing on priority groups.