The objective of the study was to assess the effectiveness of neonatal mandibular distraction in treatment of obstructive sleep apnea in the perinatal period in preventing a tracheotomy. This was a prospective study of 17 infants at two centers with severe micrognathia who demonstrated obstructive sleep apnea refractory to conservative therapy. Age at surgery varied from 5 to 120 days. Distraction was performed at a rate of 2 mm/d. After distraction, callus consolidation was allowed for 4 to 6 weeks, and the device was then removed. Each child underwent a three-dimensional computed tomography scan before surgery and approximately 3 months after surgery. Of the 17 patients, 14 successfully underwent extubation and demonstrated significant improvement in the obstructive sleep apnea. Postoperative horizontal ramus length increased from 23.3 to 34.8 mm after surgery. Mean maxillary mandibular discrepancy was 8.28 mm before surgery and 2.2 mm after surgery. Ten infants who underwent pre- and postoperative polygraphic studies showed improvement in obstructive apnea. Three patients had postoperative polysomnographic studies only; the results were also within the normal range. The mean follow-up interval was 16.5 months (range: 8–48 months). Neonatal distraction is an effective method for treatment of micrognathia with obstructive sleep apnea in the perinatal period in preventing a tracheotomy.