We evaluated the association between early-onset sepsis and neonatal encephalopathy in a low-middle-income setting. We undertook a retrospective study in newborns with gestational age ≥35 weeks and/or birth weight ≥2500 grams, diagnosed with neonatal encephalopathy. Early-onset sepsis was defined as culture-confirmed sepsis or probable sepsis. Of 10,182 hospitalised newborns, 1027 (10.1%) were diagnosed with neonatal encephalopathy, of whom 52 (5.1%) had culture-confirmed and 129 (12.5%) probable sepsis. The case fatality rate for culture-confirmed sepsis associated neonatal encephalopathy was threefold higher compared to neonatal encephalopathy without sepsis (30.8% vs. 10.5%, p < 0.001). Predictors of mortality for culture-confirmed sepsis associated neonatal encephalopathy included severe neonatal encephalopathy (aOR 6.51, 95%CI: 1.03-41.44) and seizures (aOR 10.64, 95%CI: 1.05-107.39). In this setting, 5% of neonatal encephalopathy cases was associated with culture-confirmed sepsis and a high case fatality rate.