Neonatal meningitis is one of the important causes of infant mortality and morbidity. Periventricular white matter of neonatal brain is known to be vulnerable to oxidative and hypoxic/ischemic injury secondary to neuro-infections. The aim of this study was to assess periventricular white matter damage in neonatal bacterial meningitis using diffusion tensor imaging (DTI). DTI was performed in 7 age/sex matched controls and 14 neonates with proven bacterial meningitis at the time of diagnosis and after 3 weeks of antibiotic treatment. Region of interest were placed on periventricular white matter to quantify fractional anisotropy (FA) and mean diffusivity (MD). Based on the clinical prognosis and conventional MRI, patients were grouped into those with normal and with abnormal outcome. Compared to controls significantly decreased FA values were observed in entire periventricular white matter except for left parietal white matter in patients with abnormal outcome. Even in those with normal outcome significant decrease in FA values were observed in right parietal and bilateral occipital white matter compared to controls. Decreased FA values in the periventricular white matter regions in neonatal meningitis confirm microstructural white matter injury.