Renal dysfunction is one of the most common complications of neonatal asphyxia which is of poor prognosis and resulting in permanent renal damage in about 40% of survivors. The aim of this study is to determine whether theophylline could prevent or ameliorate renal dysfunction in term neonates with perinatal asphyxia. We assigned 82 severely asphyxiated term infants (Apgar score ≤ 5, Thompson>15) into 2 groups to receive intravenously a single dose of either theophylline (5 mg/kg; n=41) or placebo (n=41) during their first 60 minutes of life. We have measured the serum creatinine, urine creatinine, urinary sodium and GFR was calculated using Schwartz formula at 1st, 3rd and 5th days of infant's life. The obtained results showed a significant increase in GFR and urinary creatinine at 5th day of life in theophylline group compared to placebo. While, there was a significant decrease in the levels of serum creatinine and urinary sodium of theophylline group at 1st, 3rd and 5th day compared to placebo. The complications associated with asphyxia were lesser in theophylline group than placebo. We concluded that, a single dose of intravenous theophylline may be considered for all babies with severe asphyxia to ameliorate kidney dysfunction and decline other complications.