Background: Allopurinol, an xanthine oxidase (XO) inhibitor, is a promising intervention that may provide neuroprotection for neonates with hypoxic-ischemic encephalopathy (HIE). Currently, a double-blind, placebo-controlled study (ALBINO, NCT03162653) is investigating the neuroprotective effect of allopurinol in HIE neonates. Objective: The aim of the current study was to establish the pharmacokinetics (PK) of allopurinol and oxypurinol, and the pharmacodynamics (PD) of both compounds on hypoxanthine, xanthine, and uric acid in HIE neonates. The dosage used and the effect of allopurinol in this population, either or not undergoing therapeutic hypothermia (TH), were evaluated. Methods: Forty-six neonates from the ALBINO study and two historical clinical studies were included. All doses were administered on the first day of life. In the ALBINO study (n = 20), neonates received a first dose of allopurinol 20 mg/kg, and, in the case of TH (n = 13), a second dose of allopurinol 10 mg/kg. In the historical cohorts (n = 26), neonates (all without TH) received two doses of allopurinol 20 mg/kg in total. Allopurinol and oxypurinol population PK, and their effects on inhibiting conversions of hypoxanthine and xanthine to uric acid, were assessed using nonlinear mixed-effects modelling. Results: Allopurinol and oxypurinol PK were described by two sequential one-compartment models with an autoinhibition effect on allopurinol metabolism by oxypurinol. For allopurinol, clearance (CL) was 0.83 L/h (95% confidence interval [CI] 0.62–1.09) and volume of distribution (Vd) was 2.43 L (95% CI 2.25–2.63). For metabolite oxypurinol, CL and Vd relative to a formation fraction (fm) were 0.26 L/h (95% CI 0.23–0.3) and 11 L (95% CI 9.9–12.2), respectively. No difference in allopurinol and oxypurinol CL was found between TH and non-TH patients. The effect of allopurinol and oxypurinol on XO inhibition was described by a turnover model of hypoxanthine with sequential metabolites xanthine and uric acid. The combined allopurinol and oxypurinol concentration at the half-maximal XO inhibition was 0.36 mg/L (95% CI 0.31–0.42). Conclusion: The PK and PD of allopurinol, oxypurinol, hypoxanthine, xanthine, and uric acid in neonates with HIE were described. The dosing regimen applied in the ALBINO trial leads to the targeted XO inhibition in neonates treated with or without TH.