Congenital malaria, defined as the presence of malaria parasites in the erythrocytes of newborns aged <7 days, was considered rare in endemic areas until recent studies started reporting high prevalence rates. Various theories have been postulated to explain this phenomenon, but they are not proven conclusively from research. Against this background, a prospective study was designed with the following objectives. To determine the prevalence of congenital malaria parasitaemia and identify possible risk factors amongst newborns delivered in O.O.U.T.H Sagamu, Ogun State. Over a 6-month period, 192 live newborns and their mothers were consecutively recruited into the study. Within 3 days of life, neonatal peripheral blood samples were collected for malaria screening by blood film microscopy and detection of plasmodium lactate dehydrogenase (pLDH) with the OptiMAL Rapid Malaria Test kit. Maternal peripheral blood samples were taken simultaneously, to check for malaria infestation by blood film microscopy, and questionnaires were administered on the mothers to identify possible factors associated with the development of neonatal parasitaemia. Neonatal clinical and laboratory data were recorded in a pro forma designed for the study. Data analysis was done with Epi-info version 6 software and level of significance set at <5%. Twenty-one of 192 newborns delivered in O.O.U.T.H within the study period were diagnosed as having congenital malaria by blood film microscopy, giving a prevalence rate of 10.9%. The main identified innate neonatal risk factor for congenital malaria parasitaemia was prematurity. First-order pregnancy, history of fever within 3 months of delivery and peripheral parasitaemia at delivery (p < 0.001) were the variables that were significantly higher in the mothers of the parasitemic newborns. We conclude that congenital malaria parasitaemia in tropical endemic areas is not rare. Pre-term neonates, infants of primigravidae, women with history of fever within 3 months of delivery and women with post-partum peripheral parasitaemia may benefit from routine screening for malaria.