Cephalhematoma is normally a self-limiting condition affecting 1%-2% of live births, especially following instrumental forceps delivery. The sub-periosteal bleed is characteristically limited by the cranial sutures. Although benign in most instances, this condition may, in a small proportion of cases, be complicated by hyperbilirubinemia or scalp infection. We describe a case of cephalhematoma in a newborn infant infected with Escherichia coli resulting in an extensive deep seated scalp abscess. The infection was also systemic causing E. coli septicemia and initial assessment assumed local extension including bone and meningeal to cause skull osteomyelitis and meningitis respectively. Further investigations and multiple-modality imaging with ultrasound, CT scan and bone scintigraphy outlined the involvement as limited to the scalp, resulting in a shorter antibiotic treatment period and earlier discharge from hospital. The infant recovered well with parenteral antibiotics, saucerization of the abscess and a later skin grafting procedure.