The high caesarean section rate in the Islamic Republic of Iran could be a risk for adverse neonatal outcomes. This population-based, case–control study investigated the association of caesarean section and neonatal death. A total of 146 mothers whose babies had died during 28 days after birth were compared with 549 mothers with live newborns, according to delivery route and reasons for undergoing caesarean section. The crude odds ratio (OR) for the association of caesarean section and neonatal death was 1.97 (1.35–2.87). The adjusted OR was 2.19 (1.48–3.24) controlled for mother’s education, parity and age. Adjusted ORs for elective caesarean, previous caesarean and emergency caesarean were 0.65 (0.26–1.62), 2.77 (1.64–4.66) and 2.51 (1.56–4.03) respectively. The ORs for caesarean delivery and neonatal death varied by mother’s education, parity and age. The association of caesarean section with neonatal death is complex and is modified by other influencing factors.