Objective To determine the extent of off-label and unlicensed prescribing in hospitalized newborns and to identify patient-related risk factors associated with off-label prescribing. Methods A prospective cohort study was conducted between January and March 2016 at a neonatology department of a tertiary-care hospital in the Eastern province. All consecutive admissions to all neonatal care levels meeting the inclusion and exclusion criteria were eligible for enrollment. All prescriptions were classified as off-label or unlicensed according to drug product monograph. Clinical and prescription data were extracted using a pilot-tested structured data collection sheet. Results During the study period583 prescriptions were made for 138 newborns, of which 29.7% (173/583) and 12.9% (75/583) were classified as off-label and unlicensed drugs respectively for use in neonates. Thirty-four percent (47/138) of patients received at least one off-label/unlicensed medicine. Mechanical ventilation, admission to the neonatal intensive care unit and length of hospital stay were identified as independent risk factors associated with prescribing of at least one off-label medication. Conclusion Use of off-label and unlicensed drugs in hospitalized newborns seems to be a common practicein this Saudi hospital. Future research should evaluate safety and efficacy of off-label and/or unlicensed use of drugs in neonates.