IV fat emulsion (IVFE) is an integral part of the parenteral nutrition (PN) regimen in neonates. It provides a concentrated isotonic source of calories and prevents or reverses essential fatty acid deficiency. Continuous administration of IV fat with PN regimens prolongs the viability of peripheral IV lines in infants who might have limited venous access. IVFE must be administered separately from the PN solution in neonates. The acidic pH of a PN solution is necessary for maximum solubility of calcium and phosphorus. If fat emulsion is added to the PN solution, as is done in 3-in-1 (total nutrient admixture) solutions, the high amount of calcium and phosphorus needed by these infants may result in an unseen precipitate with serious consequences. Continuous fat infusion over 24 hours is the preferred method in neonates. The administration rate of 0.15 g/kg/hour for IVFE in the neonate should not be exceeded. Essential fatty acid deficiency can be prevented in neonates by providing IVFE in a dose of 0.5-1.0 g/kg/day. Carnitine is not routinely required to metabolize IVFE in the neonate. Infants should receive 20% lipid emulsion to improve clearance of triglycerides and cholesterol. Serum triglyceride levels should be maintained at <150-200 mg/dL in neonates. There are concerns about potential adverse effects of early administration of IV fat in very-low-birth-weight infants weighing <800 g. We hold the IV fat dose at 1.0-1.5 g/kg/day until the second week of life in infants <30 weeks gestation.