Although post-neonatal and child mortality rates have declined dramatically in many developing countries in recent decades, neonatal mortality rates have remained relatively unchanged. Neonatal mortality now accounts for approximately two-thirds of the 8 million deaths in children less than 1 year of age, and nearly four-tenths of all deaths in children less than 5 years of age. Worldwide, 98% of all neonatal deaths occur in developing countries, mostly at home, and largely attributable to infections, birth asphyxia and injuries, and consequences of prematurity, low birth weight and congenital anomalies. We review principal determinants of neonatal morbidity and mortality during the antenatal, intrapartum and postpartum periods, and propose priority community-based research activities to develop, test and adapt inexpensive, practical and sustainable interventions during these periods to reduce perinatal and neonatal morbidity and mortality in developing countries.