Hypotonia is a common presenting symptom in the neonatal intensive care unit (NICU). Hypotonia can be a manifestation of an underlying systemic illness, a primary nervous system disease, or a peripheral nervous system disease. Examination and history can suggest specific causes, but rapid and accurate diagnosis remains challenging due to the broad spectrum of causes. Options for disease-targeted therapies have increased the importance of early diagnosis. This article focuses on the evaluation and diagnostic approach of the hypotonic newborn in the NICU, with an emphasis on rapid identification of treatable conditions and updated recommendations on the utilization of genetic testing.