During the first week of life newborns often have physiological jaundice that should disappear by the end of the second week in term babies; preterm babies may have physiological jaundice until the end of the third week. Persisting jaundice may indicate serious underlying causes. Prolonged neonatal jaundice occurs in 15-30% of newborns and is often due to breast milk jaundice which is a benign condition. All newborns with prolonged jaundice should be observed and before diagnosing breast milk jaundice all the other possible pathological causes should be ruled out. When observing babies with jaundice it is important to determine the level of conjugated and unconjugated bilirubin. Conjugated hyperbilirubinemia may be a sign of a serious condition that manifests with cholestasis, for example, biliary atresia, in which the outcome for the newborn is greatly influenced by the age of the child at the time of the Kasai procedure.