Objective: The objective of the study is to determine the utility of hematological parameters and C-reactive protein (CRP) levels as diagnostic markers in the early diagnosis of Neonatal Sepsis. Materials and Methods: Study area: Neonatal intensive care unit at KLE's Dr. Prabhakar Kore Hospital, Belagavi. Study design: A cross-sectional study. Study period: January 2017-December 2017 over a period of 1 year. Study participants: Neonates with signs suggestive of sepsis admitted to Neonatal intensive care unit at KLE's Dr. Prabhakar Kore Hospital, Belagavi. Sample Size: 34. Sampling procedure: Universal sampling method. Results: Considering blood culture as gold standard, sensitivity of hemoglobin levels was 35.2%, specificity was 57.6%, positive predictive value was 50%, and negative predictive value was 57.6%. P = 0.659, which was statistically insignificant. Sensitivity of altered white blood cell count was 47.65%, specificity was 53.8%, positive predictive value was 62.5%, negative predictive value of 38.8% and P = 0.933 which was statistically insignificant. Sensitivity of altered platelet count was 38%, specificity was 69.2%, positive predictive value was 66.6%, negative predictive value of 59% and P = 0.664 which was statistically insignificant. Sensitivity of elevated CRP levels was 57.1%, specificity was 92.3%, positive predictive value was 92.3%, negative predictive value of 57.1%, and P = 0.0039 which was statistically significant. Conclusion: Higher sensitivity and negative predictive value of CRP compared to hematological parameters makes it a better diagnostic marker in the early diagnosis of neonatal sepsis.