On the basis of coupled neutronic/hydrodynamic calculations, we examine the neutron heating effects on the ignition and burn propagation in laser-imploded D-T pellets. The fusion-produced neutrons deposit their energy all over the pellet region since the mean-free-path of the neutron is long. The fraction of neutron energies deposited to the central spark region during the ignition phase is too small to reduce the threshold energy of the laser for ignition. In the burn phase, the neutron heating decreases the maximum compression ratio and accelerates the plasma expansion. The inclusion of neutron heating hence decreases the pellet gain from the value in the case without neutron heating. Calculations neglecting the transport of neutron recoils overestimate the neutron heating rate in the reactor-grade pellets.