Neonatal jaundice continues to be a common problem. Kernicterus, although rare, continues to be a very real concern in both full-term and preterm infants. The diagnosis of kernicterus requires not only bilirubin staining in a characteristic pattern in the brain but also neuronal damage. With careful pathologic evaluation, kernicterus should be distinguishable from the brain damage associated with asphyxia and hypoxia. Early hospital discharge is a risk factor for the development of kernicterus. Combining the use of traditional phototherapy from above and a fiberoptic blanket from below has improved the effectiveness of phototherapy. Clinical trials with SnMP as an inhibitor of heme oxygenase appear encouraging; no adverse effects were noted, except for mild, occasional photosensitization manifest by erythema in babies receiving phototherapy. One theoretical toxicity of inhibitors of heme oxygenase involves the recent observation that carbon monoxide (CO) is a neurotransmitter in certain regions of the brain, possibly comparable to nitric oxide (NO), and the consequences of such inhibition are unknown. More research is needed to improve our understanding about the entry of bilirubin into the brain, the predilection of bilirubin for certain brain regions, and the cytotoxicity of bilirubin. In the United States, there is currently no generally accepted method to predict hyperbilirubinemia or kernicterus. Brain stem auditory evoked responses and MRI can both be used effectively to monitor the effects of severe hyperbilirubinemia.