Objective To explore the effect of umbilical cord milking (UCM) on the prognosis of neonates. Methods 600 cases of neonate from January 2015 to May 2016 in our hospital were selected as the research object, which were randomly divided into 300 cases of intervention group and 300 cases of control group according to birth order. The intervention group were underwent UCM, and the control group were underwent immediate cord clamping after be born. The method of squeezing umbilical cord was applied to intervene the newborns in intervention group, the conventional method of immediate ligation of umbilical cord after birth was applied to the newborns in control group. The two groups of newborn were compared with each other in terms of hemoglobin, hCT, serum total bilirubin, newborn blood pressure, occurrence of hypotension after birth, medication of dilatation, polycythemia of newborn, intracranial hemorrhage, necrotizing enterocolitis, retinopathy of premature infant, incidence of leucomalacia and mortality of newborn. Results The hemoglobin, hCT of newborn in intervention group were significantly higher than that of the ones in control group, the inter-group difference was significant (P<0.05), the occurrence of hypotension after birth and usage rate of medication of dilatation of newborn in intervention group were significantly lower than that of the ones in control group, the inter-group difference was significant (P<0.05), the incidence of intracranial hemorrhage, necrotizing enterocolitis, leucomalacia and mortality of newborn in intervention group were equally significantly lower than that of the ones in control group, the inter-group difference was significant (P<0.05). Conclusion The application of method of squeezing umbilical cord to intervene the newborns can clearly enhance the level of hemoglobin of newborn after birth, diminish the anemia of infant, and reduce the incidence of hypotension and intracranial hemorrhage of newborn after birth.