In neonatal period anemia is a complex problem owing to the unique blood picture. The erythrocytic system undergoes serial adaptation to meet progressively changing demands of oxygen in the embryo, the fetus and neonate. This leads to rapid change in normal hematological change in post-birth period. Definition of anemia is difficult because as described earlier, several important factors influence normal blood in the newborn infants. The etiology of neonatal anemia can be classified into i) hemorrhage (ii) hemolysis (iii) failure of red cell production. Severe fetal hemorrhage may accompany various placental anomalies like placenta praevia, abruptio placenta and accidental incision of placenta during the caesarian section. It is reported that 10% of all infants born following placenta praevia and 4% of infants born following abruptio placenta present with severe anemia. The passage of fetal erythrocytes in maternal circulation occurs commonly during pregnancy. In 50% of pregnancies some fetal cells are passed in maternal circulation sometimes during gestation or during birth process. Treatment of a neonate with anemia due to blood depends on the degree of hypovolemia or anemia and whether the blood loss has been acute or chronic. Newborn with pale skin should be differentiated from an asphyxiated baby.