Epidemiological profiles and the rundown crisis of antimicrobial resistance from bacterial isolates in neonatal sepsis compel regular surveillance to enhance data-driven decision-making. Accordingly, this study aimed to assess the phenotypic epidemiology and antimicrobial resistance profiles of bacteria isolated from clinically suspected neonatal sepsis in Ethiopia. A total of 342 neonates suspected of clinical sepsis were randomly included in a prospective observational study conducted at the neonatal intensive care unit (NICU) of Jimma medical center (JMC) from May 2022 to July 2023. Blood samples were collected from each neonate and subjected to a culture test for identification of bacterial isolates and their antibiotic resistance profiles following the standardized guidelines. The laboratory results, along with relevant clinical data, were recorded using WHONET and analyzed using STATA software. Out of the 342 blood samples that were analyzed, 138 samples (40.4%, 95% CI: 35.1-45.6, P<0.01) exhibited proven bacterial infection. The infection rates were notably higher in males with 85/138 (61.6%, 95% CI: 53.4-69.8, P<0.01) and neonates aged 0-3 days with 81/138 (58.7%, 95% CI: 50.5-66.9, P<0.01). The majority of the infections were attributed to Gram-negative bacteria, accounting for 101/138(73.2%, 95% CI: 65.6-80.7) cases, with 69/101(68.3%, 95% CI: 63.8-72.8) cases involving ESBL-producing strains, while Gram-positive bacteria were responsible for 26.8% (95% CI: 19.3-34.4) of the infections. The predominant isolates included Klebsiella pneumoniae (37.7%, 95% CI: 29.6-45.8), Coagulase-negative Staphylococci (CoNs) (20.3%, 95% CI: 13.6-27.0), and Acinetobacter species (11.6%, 95% CI: 6.0-17.1). Of the total cases, 43/72 (59.7%, 95% CI: 48.4-71.1, P<0.01) resulted in mortality, with 28/72 (38.9%, 95% CI: 27.70-50.1, P<0.03) deaths linked to Extended-Spectrum Beta-Lactamase (ESBL)-producing strains. Klebsiella pneumoniae displayed high resistance rates to trimethoprim-sulfamethoxazole (100%), ceftriaxone (100%), cefotaxime (98.1%), ceftazidime (90.4%), and gentamicin (84.6%). Acinetobacter species showed resistance to ampicillin (100%), cefotaxime (100%), trimethoprim-sulfamethoxazole (75%), ceftazidime (68.8%), chloramphenicol (68.8%), and ceftriaxone (68.8%). Likewise, CoNs displayed resistance to ampicillin (100%), penicillin (100%), cefotaxime (86.0%), gentamicin (57.2%), and oxacillin (32.2%). Multidrug resistance was observed in 88.4% (95% CI: 81.8-93.0) of isolates, with ESBL-producers significantly contributing (49.3%, 95% CI: 45.1-53.5). Furthermore, 23.0% (95% CI: 15.8-31.6) exhibited a prevalent resistance pattern to seven distinct antibiotic classes. The prevalence and mortality rates of neonatal sepsis were significantly high at JMC, with a notable surge in antibiotic and multidrug resistance among bacterial strains isolated from infected neonates, specifically ESBL-producers. These resistant strains have a significant impact on infection rates and resistance profiles, highlighting the requisite for enhanced diagnostic and antimicrobial stewardship, stringent infection control, and further molecular characterization of isolates to enhance neonatal survival.