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Progress towards the Millennium Development Goals (MDGs) has been uneven. Inequalities in child health are large and effective interventions rarely reach the most in need. Little is known about how to reduce these inequalities. We describe and explain the equity impact of a women's group intervention in India that strongly reduced the neonatal mortality rate (NMR) in a cluster-randomised trial. We conducted secondary analyses of the trial data, obtained through prospective surveillance of a population of 228,186. The intervention effects were estimated separately, through random effects logistic regression, for the most and less socio-economically marginalised groups. Among the most marginalised, the NMR was 59% lower in intervention than in control clusters in years 2 and 3 (70%, year 3); among the less marginalised, the NMR was 36% lower (35%, year 3). The intervention effect was stronger among the most than among the less marginalised (P-value for difference = 0.028, years 2-3; P-value for difference = 0.009, year 3). The stronger effect was concentrated in winter, particularly for early NMR. There was no effect on the use of health-care services in either group, and improvements in home care were comparable. Participatory community interventions can substantially reduce socio-economic inequalities in neonatal mortality and contribute to an equitable achievement of the unfinished MDG agenda. [ABSTRACT FROM AUTHOR]