The nationwide incidence of neonatal brachial plexus palsy in the United States is unknown. The purpose of this study was to determine the incidence of this condition in the United States and to identify potential risk factors for neonatal brachial plexus palsy. Data from the 1997, 2000, and 2003 Kids' Inpatient Database data sets were utilized for this study. Patients were identified with use of the International Classification of Diseases, Ninth Revision (ICD-9), code 767.6 for neonatal brachial plexus palsy. Previously reported risk factors for this condition, including shoulder dystocia, instrumented delivery, breech delivery, an exceptionally large baby (>4.5 kg), heavy infant weight for gestational dates, multiple birth mates, and cesarean delivery, were also identified with use of ICD-9 codes. Multivariate logistic regression analysis was utilized to assess the association of neonatal brachial plexus palsy with its risk factors, after adjusting for sociodemographic characteristics, such as gender, race, and payer status; hospital-based characteristics, such as number of hospital beds, hospital location, region, type, and teaching status; and the effect of time. Over eleven million births were recorded in the database, and 17,334 had a documented brachial plexus injury in the total of three years, yielding a nationwide mean and standard error of incidence of neonatal brachial plexus palsy in the United States of at least 1.51 +/- 0.02 cases per 1000 live births. The incidence of this condition has shown a significant decrease over the years (p < 0.01). In the multivariate analysis, shoulder dystocia had a 100 times greater risk, an exceptionally large baby (>4.5 kg) had a fourteen times greater risk, and forceps delivery had a nine times greater risk for injury. Having a twin or multiple birth mates and delivery by cesarean section had a protective effect against the occurrence of neonatal brachial plexus palsy. Forty-six percent of all children with neonatal brachial plexus palsy had one or more known risk factors, and fifty-four percent had no known risk factors. This nationwide study of neonatal brachial plexus palsy in the United States demonstrates a decreasing incidence over time. Shoulder dystocia poses the greatest risk for brachial plexus injury, and having a twin or multiple birth mates and delivery by cesarean section are associated with a protective effect against injury. Most children with neonatal brachial plexus palsy did not have known risk factors.