Health monitoring is crucial for the survival of the ill and fragile infants admitted at the neonatal intensive care unit (NICU) in a hospital. However, the adhesive electrodes and wires used for monitoring cause discomfort to such patients and hamper the parent-child interaction. In this paper we propose the application of wireless transmission technology for neonatal monitoring at NICU. To achieve the requirements of wireless data acquisition for physiological monitoring, a design approach based on Zigbee technology is proposed in this paper. This approach integrates the Arduino based microcontroller ATMEGA 328P, which acts as a sensor node with the wireless Zigbee module. It realizes the function of data acquisition, signal processing and wireless transmission. It can also communicate with peripheral devices via serial ports to monitor the vital sign parameters using LCD display. It changes the traditional wired medical care system into a wireless and reduces cable connections between the patient and monitoring device. The system can enable infants to be tested in a more comfortable environment thus improving the quality of medical care. The module is simple less expensive and consumes less power. It is suitable for developing family oriented portable medical equipment. The system has been tested on adult subjects and need to be tested on neonatal subjects.