Neonatal sepsis is a significant contributor to neonatal morbidity and mortality worldwide. It is more prevalent in developing countries. Thus, understanding the risk factors for neonatal sepsis is critical to minimizing the incidence of infection, particularly in Ethiopia. The purpose of this study was to identify the risk factors for neonatal sepsis in neonates admitted to neonatal intensive care units of public hospitals in Southeast Ethiopia in 2020. An institution-based, retrospective unmatched case-control study was conducted on 97 cases and 194 controls in neonatal intensive care units of public hospitals in Southeast Ethiopia. A pretested, structured questionnaire was used to collect the data. Data was entered using EpiData 3.1 and analyzed using SPSS version 23. Bivariable and multivariable logistic regression analyses were performed to identify associated factors. An adjusted odds ratio with a 95% confidence interval was used to determine the degree of association, and statistical significance was declared at a p value of < 0.05. In this study, 97 cases and 194 controls were included. About two-thirds (63.9%) of cases were with early onset neonatal sepsis (<7 days). Mode of delivery with spontaneous vaginal delivery (AOR:5.032; 95% CI (1.887-13.418)), type of birth attendant (traditional birth attendant) (AOR: 4.407 95% CI (1.213,16.004)), history of STI/UTI (AOR:2.543; 95% CI (1.313,4.925)), intrapartum fever (AOR:4.379; 95% CI (2.170,8.835)), APGAR score at the 5thminute < 7 (AOR:4.832; 95% CI (1.862,12.537)), neonate received resuscitation (AOR:3.830; 95% CI (1.753,8.369)), low birth weight (AOR:6.101; 95% CI (2.124,17.525)) were the identified risk factors for neonatal sepsis. Both maternal and neonatal factors contribute to the risk of neonatal sepsis. Spontaneous vaginal delivery, birth attended by the traditional birth attendant, history of STI/UTI, presence of intrapartum fever, low APGAR score at the 5th minute, neonate receiving resuscitation, and low birth weight were identified as independent risk factors for neonatal sepsis. Prompt identification of the aforementioned factors and management should be sought for all newborns.