To study the potential therapeutic effect of Salamarum on neonatal hypoxic ischemic encephalopathy (HIE). Methods Sixty two neonates with moderate HIE were randomly assigned into two groups: a Control group (n=30) receiving conventional treatment and a Treatment group (n=32) receiving salamarum treatment, using loading dosage of 200-250 mg/kg and maintenance dosage of 125 mg/kg daily for 72 hrs after admission. The disappearance time of the nervous system symptoms, the neonatal behavioral neurological assessment (NBNA) scores and the development quotient (DQ) of Gesell Development Schedules for 6-12 months old infants were recorded. Results The time to cessation of gaze and the recovery time of consciousness in the Treatment group was not significantly different from that of the Control group. The time to cessation of convulsions and the recovery time of primitive reflexes and muscular tension were significantly shorter in the Treatment group. More neonates in the Treatment group had normal scores of NBNA than the Control group at 7 and at 12-14 days of life (P< 0.05 ). Moreover, the DQ values in the Treatment group were higher than the Control group at 6-12 months of life ( 91 ± 15 vs 83 ± 15 ) (P< 0.05 ). Conclusions Early salamarum administration can shorten the disappearance time of nervous system symptoms and reduce sequelae in neonates with HIE.