Knowledge of the optical properties of neonatal skin is invaluable when developing new, or improving existing optical techniques for use at the neonatal intensive care. In this article, we present in vivo measurements of the absorption μa and reduced scattering coefficient μs′ of neonatal skin between 450 and 600 nm and assess the influence of age and skin pigmentation on the optical properties. The optical properties were measured using a spatially resolved, steady state diffuse reflectance spectroscopy setup, combined with a modified spatially resolved diffusion model. The method was validated on phantoms with known values for the absorption and reduced scattering coefficient. Values of μa and μs′ were obtained from the skin at four different body locations (forehead, sternum, hand, and foot) of 60 neonates with varying gestational age, postnatal age, and skin pigmentation. We found that μa ranged from 0.02 to 1.25 mm−1 and μs′ was in the range of 1 to 2.8 mm−1 (5th to 95th percentile of the patient population), independent of body location. In contrast to previous studies, no to very weak correlation was observed between the optical properties and gestational maturity, but a strong dependency of the absorption coefficient on postnatal age was found for dark skinned patients.