BACKGROUND Early neonatal mortality has been persistently high in developing countries. Indonesia, with its national policy of home-based, midwife-assisted birth, is an apt context for assessing the effect of home-based professional birth attendance on early neonatal survival. METHODS We pooled four Indonesian Demographic and Health Surveys and used multivariate logistic regression to analyse trends in first-day and early neonatal mortality. We measured the effect of the context of delivery, including place and type of provider, and tested for changes in trend when the 'Midwife in the Village' programme was initiated. RESULTS Reported first-day mortality did not decrease significantly between 1986 and 2002, whereas early neonatal mortality decreased by an average of 3.2% annually. The rate of the decline did not change over the time period, either in 1989 when the Midwife in the Village programme was initiated, or in any year following when uptake of professional care increased. In simple and multivariate analyses, there were no significant differences in first-day or early neonatal death rates comparing home-based births with or without a professional midwife. Early neonatal mortality was higher in public facilities, likely due to selection. Biological determinants (twin births, male sex, short birth interval, previous early neonatal loss) were important for both outcomes. CONCLUSIONS Decreasing newborn death rates in Indonesia are encouraging, but it is not clear that these decreases are associated with greater uptake of professional delivery care at home or in health facilities. This may suggest a need for improved training in immediate newborn care, strengthened emergency referral, and continued support for family planning policies.