Infections caused by Acinetobacter baumannii are a threat to neonates because of its resistance to antimicrobials, including carbapenems. In 2007, A. baumannii emerged as an important aerobic Gram-negative bacillus (12.5%, 4/32) that caused sepsis in our unit. A. baumannii from the gut of the neonates was analyzed, as this could be indicative of the antibiotic resistance of the organisms. The study attempts to understand the gut colonization with multidrug-resistant A. baumannii among hospitalized neonates with special reference to carbapenem resistance. A. baumannii was found in the gut of 11% of babies. Interestingly, 60.7% (17/28) and 21.4% (6/28) of the isolates from the gut were multidrug-resistant and carbapenem-resistant, respectively. The number of multidrug-resistant and carbapenem-resistant isolates from blood cultures were 3/4 and 1/4, respectively. The study reports for the first time OXA-23 and OXA-58 carbapenemases in A. baumannii from India. Pulsed field gel electrophoresis (PFGE) patterns indicated that the strains were diverse and no epidemic clone existed. Though A. baumannii gut colonization could not be implicated as a risk factor for subsequent sepsis, the high rate of isolation of multidrug-resistant and carbapenem-resistant isolates indicates that these therapeutic options might be drastically reduced among neonates in the future.