BACKGROUND: Neonatal pneumothorax is dependent on severity of symptoms and leak size. Treatment of Pneumothorax with Nitrogen washout is controversial. OBJECTIVE: To compare outcomes of neonates treated for spontaneous pneumothorax (SP) compared with those managed expectantly. METHODS: A retrospective review of medical records of neonates (≥34weeks) diagnosed with SP born between 2011 and 2021. Neonatal characteristics and outcomes were compared between neonates treated for SP with either targeted oxygen therapy (to stabilize saturation ≥93%) or nitrogen washout and those under expectant management. RESULTS: Among neonates with respiratory distress and desaturation (n = 64), nitrogen washout reduced median time to resolution compared to targeted oxygen therapy (31 [12-67] vs 81 [31.8-123.5] hours, p = 0.012). Expectantly managed neonates with distress (n = 87) experienced delayed feeding initiation, while time to resolution and hospital stay were similar. CONCLUSION: Nitrogen washout is superior to targeted oxygen therapy in time to resolution in infants presenting with respiratory distress and desaturation.