OBJECTIVE: Neonatal encephalopathy (NE) is the third leading cause of child mortality. Preclinical studies suggest infection and inflammation can sensitise or precondition the newborn brain to injury. This study examined perinatal risks factor for NE in Uganda. DESIGN: Unmatched case-control study. SETTING: Mulago National Referral Hospital, Kampala, Uganda. METHODS: 210 term infants with NE and 409 unaffected term infants as controls were recruited over 13 months. Data were collected on preconception, antepartum and intrapartum exposures. Blood culture, species-specific bacterial real-time PCR, C reactive protein and placental histology for chorioamnionitis and funisitis identified maternal and early newborn infection and inflammation. Multivariable logistic regression examined associations with NE. RESULTS: Neonatal bacteraemia (adjusted OR (aOR) 8.67 (95% CI 1.51 to 49.74), n=315) and histological funisitis (aOR 11.80 (95% CI 2.19 to 63.45), n=162) but not chorioamnionitis (aOR 3.20 (95% CI 0.66 to 15.52), n=162) were independent risk factors for NE. Among encephalopathic infants, neonatal case fatality was not significantly higher when exposed to early neonatal bacteraemia (OR 1.65 (95% CI 0.62 to 4.39), n=208). Intrapartum antibiotic use did not improve neonatal survival (p=0.826). After regression analysis, other identified perinatal risk factors (n=619) included hypertension in pregnancy (aOR 3.77), male infant (aOR 2.51), non-cephalic presentation (aOR 5.74), lack of fetal monitoring (aOR 2.75), augmentation (aOR 2.23), obstructed labour (aOR 3.8) and an acute intrapartum event (aOR 8.74). CONCLUSIONS: Perinatal infection and inflammation are independent risk factors for NE in this low-resource setting, supporting a role in the aetiological pathway of term brain injury. Intrapartum antibiotic administration did not mitigate against adverse outcomes. The importance of intrapartum risk factors in this sub-Saharan African setting is highlighted.