Perfusion index is a non-invasive method to assess the peripheral perfusion at a specific monitoring site measured by masimo pulse oximeter using signal extraction technology. Perfusion Index is an important measure to diagnose peripheral perfusion noninvasively. Present study is planned to find out the cut-off value of perfusion index for preterm neonates. 633 preterm neonates of 28-36 wks were followed simultaneously for perfusion index and capillary refill time. Capillary refill time more than 3 is a sign of poor peripheral circulation. Using the statistics of diagnostic tests, the perfusion index cut-off for sick preterm is 1.3sec by plotting in receiver operator characteristics curve. Capillary refill time more than 3 is taken as gold standard. The sensitivity of perfusion index is 88%. Perfusion index is a very important non-invasive measure to diagnose sick preterm.