Introduction Neonatal infections contribute substantially to infant mortality in Nigeria and globally. Management requires hospitalization, which is not accessible to many in low resource settings. World Health Organization developed a guideline to manage possible serious bacterial infection (PSBI) in young infants up to two months of age when a referral is not feasible. We evaluated the feasibility of implementing this guideline to achieve high coverage of treatment. Methods This implementation research was conducted in out-patient settings of eight primary health care centres (PHC) in Lagelu Local Government Area (LGA) of Ibadan, Oyo State, Nigeria. We conducted policy dialogue with the Federal and State officials to adopt the WHO guideline within the existing programme setting and held orientation and sensitization meetings with communities. We established a Technical Support Unit (TSU), built the capacity of health care providers, supervised and mentored them, monitored the quality of services and collected data for management and outcomes of sick young infants with PSBI signs. The Primary Health Care Directorate of the state ministry and the local government led the implementation and provided technical support. The enablers and barriers to implementation were documented. Results From 1 April 2016 to 31 July 2017 we identified 5278 live births and of these, 1214 had a sign of PSBI. Assuming 30% of births were missed due to temporary migration to maternal homes for delivery care and approximately 45% cases came from outside the catchment area due to free availability of medicines, the treatment coverage was 97.3% (668 cases/6861 expected births) with an expected 10% PSBI prevalence within the first 2 months of life. Of 1214 infants with PSBI, 392 (32%) infants 7-59 days had only fast breathing (pneumonia), 338 (27.8%) infants 0-6 days had only fast breathing (severe pneumonia), 462 (38%) presented with signs of clinical severe infection (CSI) and 22 (1.8%) with signs of critical illness. All but two, 7-59 days old infants with pneumonia were treated with oral amoxicillin without a referral; 80% (312/390) adhered to full treatment; 97.7% (381/390) were cured, and no deaths were reported. Referral to the hospital was not accepted by 87.7% (721/822) families of infants presenting with signs of PSBI needing hospitalization (critical illness 5/22; clinical severe infection; 399/462 and severe pneumonia 317/338). They were treated on an outpatient basis with two days of injectable gentamicin and seven days of oral amoxicillin. Among these 81% (584/721) completed treatment; 97% (700/721) were cured, and three deaths were reported (two with critical illness and one with clinical severe infection). We identified health system gaps including lack of staff motivation and work strikes, medicines stockouts, sub-optimal home visits that affected implementation. Conclusions When a referral is not feasible, outpatient treatment for young infants with signs of PSBI is possible within existing programme structures in Nigeria with high coverage and low case fatality. To scale up this intervention successfully, government commitment is needed to strengthen the health system, motivate and train health workers, provide necessary commodities, establish technical support for implementation and strengthen linkages with communities. Registration Trial is registered on Australian New Zealand Clinical Trials Registry (ANZCTR) ACTRN12617001373369.