Neonatal sepsis, a critical systemic infection, remains a major challenge in global health. Advances in neonatal care have improved survival rates, but survivors often experience long-term cognitive impairments. This paper explores the mechanisms by which neonatal sepsis impacts neurodevelopment, focusing on neuroinflammation, hypoxic-ischemic injury, and disruptions in the gut-brain axis. Risk factors such as prematurity, low birth weight, and recurrent infections exacerbate these outcomes. Survivors frequently exhibit deficits in memory, executive functioning, language, and behavioral regulation. Early detection, targeted interventions, and continuous support are crucial to improving outcomes. Addressing these challenges is essential to reducing the lifelong burden of neonatal sepsis on children, families, and healthcare systems.