We conducted a systematic review and meta-analysis of randomized controlled trials (RCTs) to evaluate the efficacy of chlorhexidine application to the umbilical cord in neonates. We searched MEDLINE and other electronic databases, and included all RCTs that evaluated the effect of single or multiple chlorhexidine cord applications on the neonatal mortality rate (NMR) and/or the incidence of systemic sepsis and omphalitis. A total of six RCTs—four community-based cluster RCTs and two hospital-based trials—were included in the review. Of the four cluster RCTs, three were conducted in South Asia in settings with high rates of home births (>92%) while the fourth, available only as an abstract, was conducted in Africa. Pooled analysis by the ‘intention-to-treat’ principle showed a significant reduction in NMR after chlorhexidine application (four studies; relative risk (RR) 0.85; 95% confidence interval (CI) 0.76 to 0.95; fixed effects (FE) model). On subgroup analysis, only multiple applications showed a significant effect (four studies; RR 0.88; 95% CI 0.78 to 0.99) whereas a single application did not (one study; RR 0.86; 0.73 to 1.02). Similarly, only the community-based trials showed a significant reduction in NMR (three studies; RR 0.86; 95% CI 0.77 to 0.95), while the hospital-based study did not find any effect (RR 0.11; 0.01 to 2.03). Since all the studies were conducted in high-NMR settings (≥30 per 1000 live births), we could not determine the effect in settings with low NMRs. Only one study—a hospital-based trial from India—reported the incidence of neonatal sepsis; it did not find a significant reduction in any sepsis (RR 0.67; 95% CI 0.35 to 1.28). Pooled analysis of community-based studies revealed significant reduction in the risk of omphalitis in infants who received the intervention (four studies; RR 0.71; 95% CI 0.62 to 0.81). The hospital-based trial had no instances of omphalitis in either of the two groups. Chlorhexidine application delayed the time to cord separation (four studies; mean difference 2.11 days; 95% CI 2.07 to 2.15; FE model). Chlorhexidine application to the cord reduces the risk of neonatal mortality and omphalitis in infants born at home in high-NMR settings. Routine chlorhexidine application, preferably daily for 7 to 10 days after birth, should therefore be recommended in these infants. Given the paucity of evidence, there is presently no justification for recommending this intervention in infants born in health facilities and/or low-NMR settings.