Necrotizing pneumonia is a severe complication of pneumonia, characterized by local destruction of lung tissue with development of multiple small cavities (abscesses) and may be associated with empyema. Empyema is an unusual complication in neonates with limited data reported. We present a healthy term neonate with late-onset sepsis caused by Methicillin-resistant Staphylococcus aureus (MRSA) bacteremia due to severe necrotizing pneumonia associated with advanced stage empyema. To the best of our knowledge this is the youngest reported patient with multifocal lung abscesses associated with stage 2 empyema treated successfully without surgical intervention.