Introduction: According to World Health Organization (WHO), every year about 15 million babies are born prematurely around the world and that is more than 1 in 10 of all babies born worldwide. The NICU environment may interfere with the maturation and organization of preterm infant's central nervous system. Nesting enables the new born to maintain a flexed posture and facilitates physiological parameters. The aim of the study was to determine the effectiveness of Nesting Technique on Posture and Physiological Parameters among preterm and low birth weight babies. Materials and methods: The study was quasi experimental one group pre- and posttest design. A total of 40 preterm and low birth weight babies were selected by purposive sampling technique. The tool comprised demographic data, observation checklist for posture, and a structured observation checklist for physiological parameters. The babies were placed in the nest for 6 hours daily for 5 days. Data analysis was done using mean, percentage, standard deviation, and ANOVA. Results: Most of the mothers [22 (55%)] were in the age group between 25 years and 30 years. With regard to the age of the baby, 11 (27.5%) were 4 days old. With regard to the weight, 37 (92.5%) of the babies had their weight between 1.5 kg and 2.0 kg. The mean score of posture and physiological parameters that is temperature, heart rate, respiratory rate, and oxygen saturation revealed that the low birth weight and preterm babies experienced stable posture and physiological parameters during the period of nesting, which was highly statistically significant at the p < 0.001 level. Conclusion: The study concluded that nesting technique among preterm and low birth weight babies helps stabilize the vital parameters and posture maintenance.