OBJECTIVES: To examine the incidence, mortality, and health care use related to neonatal herpes simplex virus (HSV) infection. METHODS: A retrospective longitudinal cohort study using a multistate Medicaid claims database. We identified neonates hospitalized with HSV infection from 2009 to 2015 by using discharge diagnosis codes and managed them for 6 months after discharge. Incidence rates were corrected for the imperfect sensitivity and specificity of thediagnosis codes for identifying HSV infection. RESULTS: Of 2 107 124 births from 2009 to 2015, 900 neonates were identified with HSV infection, with a corrected incidence rate of 4.5 (95% confidence interval [CI]: 4.2–4.8) per 10 000 births. The yearly disease incidence increased by 56%, from 3.4 (95% CI: 2.8–4.2) per 10 000 births (or 1 in 2941 births) in 2009 to 5.3 (95% CI: 4.6–6.1) per 10 000 births (or 1 in 1886 births) in 2015 (P, .001). Of the 900 neonates with HSV infection, 54 (6.0% [95% CI: 4.4%–7.6%]) died during the index hospitalization; there was no increase in the yearly mortality rate. Of the 692 (81.2%) infants with follow-up data, 316 (45.7%) had an emergency department visit, and 112 (16.2%) had a hospital readmission. Total payments at 6 months amounted to $60 620 431, a median of $87 602 per case of neonatal HSV infection. CONCLUSIONS: We observed an increase in neonatal HSV infection incidence over a recent 7-year period in a Medicaid population. Associated health care use and payments were substantial. Public health interventions targeting disease prevention and early diagnosis are needed.