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Pericardial effusion and cardiac tamponade secondary to umbilical venous catheterization are rare complications but potentially fatal. This article reports a case of cardiac tamponade and right pleural effusion secondary to transudation of hyperosmolar fluid from an appropriately placed umbilical venous catheter. The infant survived as a result of early diagnosis by echocardiography and urgent chest tube placement that drained both pleural and pericardial effusions. Cardiac tamponade should be highly suspected in any neonate with a central venous catheter who develops sudden, unexplained clinical deterioration in cardiopulmonary status even when the line is properly placed, and urgent echocardiography or pericardiocentesis should be considered early in management of such patients. Umbilical venous catheterization should be considered only for a select group of sick neonates due to risks involved with these lines. When an umbilical venous catheter is placed, special precautions should be taken and maintenance guidelines followed.