Hypotonia in infants in the first year of life is a common diagnostic and management challenge for pediatricians and neonatologists. Several published clinical studies have shown that a substantial proportion of cases are accounted for by genetic disorders. Rapid advances in biotechnology, bioinformatics, and molecular genetic testing have made it possible to offer specific genetic diagnoses in a timely manner. The value of clinical examination in the localization of hypotonia within the nervous system as the first step towards a diagnosis cannot be overemphasized. Due importance should be given to specific features on examination and in the selection of appropriate laboratory tests to minimize laboratory costs. Inborn errors of metabolism, although infrequently encountered, are of importance. Based on clinical evidence from published studies, an algorithm is suggested that would incorporate the clinical features and testing modalities in providing a high diagnostic yield for the clinician.