Defects in the surfactant biosynthesis are associated with respiratory distress syndrome, commonly occurring in premature infants due to lung immaturity. However, interstitial lung diseases have also been observed in full-term infants with mutations in the SFTPC, SFTPB, NKX2-1, or ABCA3 genes, involved in the surfactant metabolism. Herein, we report a newborn baby with neonatal respiratory distress and diffuse lung disease caused by ABCA3 mutation. The baby died at 5 weeks of age after developing pulmonary hypertension. Genomic DNA was analyzed for four genes involved in surfactant metabolism out of which the c. 4545C>G (p.Tyr1515*) homozygous mutation in exon 29 of ABCA3 was identified which is one of the most frequent mutation causing lethal neonatal respiratory failure in a term neonate. This case study emphasizes the importance of raising awareness about this diagnosis in the clinical settings for fruitful outcomes in health-care delivery.