Background and Aim: Ventilator Associated pneumonia (VAP) occurs 48 hours or later after initiation of mechanical ventilation. VAP is the second most common nosocomial infection in neonatal intensive care unit (NICU). Therefore, it is necessary to determine the rate, characteristics, risk factors and outcome of VAP in NICU patients. Materials and Methods: A prospective cohort study was conducted at the Mahdiyeh Hospital over a period of 1 year on all neonates who were admitted to NICU and required mechanical ventilation for more than 48 hours. Diagnosis of VAP was made according to the definition of nosocomial pneumonias for patients younger than 12 months by CDC (center for disease control and prevention). Risk factors for developing VAP such as birth weight, gestational age, gender, duration of mechanical ventilation, length of hospital stay and drugs were studied. The significant risk factors in univariate analysis were subjected to multivariate regression to determine independent predictor of VAP and mortality. Results: VAP occurred in 14 of 81 neonates (17.3%). The rate of VAP was 9 per 1000 ventilator days. The most common bacteria isolated from endotracheal aspirate were gram negative organisms (Ecoli (21.4%), Klebsiella (21.4%) and Pseudomonas (14.1%)). By multivariate analysis, duration of mechanical ventilation (B odd's ratio= 0.07, P=0.001) and anti-acid therapy (OR= 0.22, P=0.098) were two single independent risk factors for VAP. Two neonates with VAP died (14.3%) and multivariate analysis revealed that duration of mechanical ventilation (B odd's rate= -0.04, P=0.01), low birth weight (B odd's ratio= 0.002, P<0.001) and purulent sputum (hazard risk= 0.25, P=0.006) were independent predictor of mortality. Patients with VAP also had prolonged stay in NICU (59 vs 27 days). Conclusion: VAP occurred at significant rate among mechanically ventilated NICU patients. Additional studies are needed to investigate how to prevent VAP and interventions needed.