Aim: Pneumothorax (PTX) is a common morbidity during the newborn period. The aim of this study is to determine the efficacy and safety of expectant observation (EO) and needle aspiration as definitive treatment options for neonatal pneumothoraces. Materials and methods: This is a retrospective single-center study from 2017 to 2019 of 114 PTX. Maternal, neonatal, and PTX characteristics were examined and associations between type of intervention, efficacy of intervention and patient/PTX characteristics were assessed. Results: For primary treatment, 20.2% of PTX were treated with chest tube drainage (CTD), 25.4% with needle aspiration (NA), and 54.4% with EO. The efficacy of primary treatment was 91.3% with CTD, 37.9% with NA, and 96.8% with EO. NA and CTD were utilized more frequently than EO for moderate PTX (59.3 vs 40.9 vs 13.1%, p < 0.001), late PTX (75.9 vs 78.3 vs 27.4%, p < 0.001), and PTX with tension (41.4 vs 39.1 vs 1.6%, p < 0.001). In multivariate analysis, NA was the only factor associated with significantly lower success [adjusted odds ratio (OR) 0.08, 95% confidence interval (CI) 0.02–0.40]. None of the infants experienced any complications. Conclusion: Expectant observation was the most frequent treatment modality and highly successful in management of small PTX. NA was utilized in less mature neonates with more complex PTX; it was safe and avoided more invasive CTD in a significant percentage of neonates. Clinical significance: In our experience, EO and NA were highly safe, efficacious, and definitive management strategies of small pneumothoraces, not just a temporizing procedure to stabilize these infants prior to eventual CTD. CTD, which is much more invasive, was required only in a small fraction of these patients and further study is needed to define its indications.