During the last 30 years, there has been much advances in the understanding of pathogenisis of neonatal hyperbilirubinemia, but the risk of bilirubin encephalopathy are still remained for the high risk neonates. The mechanisms of bilirubin encephalopathy are not thouroughly understood. Various theories may explain bilirubin transport acoss the blood-brain barrier. Free bilirubin, not bound to albumin, can enter the brain. The permeability of the blood brain barrier to bilirubin or albuimin and bilirubin binding may play an important role in the bilirubin encephalopathy. Bilirubin binding ability of Korean infants, similar to American infants, is shown to be less than that of adults. Factors influencing bilirubin-albumin binding, such as acidosis, hypoxia, sepsis, hypothermia, hypoglycemia and immaturity should be considered for neonates at high risk of bilirubin encephalopathy. Free bilirubin is found to be significantly increased in preterm infants with low albumin level. Sulfisoxazole inhibits the bilirubin-albumin binding that resulted in increased free bilirubin concentrations even at low total bilirubin levels. Phenobarbital has no effects on bilirubin binding capacity of albumin. Phototherapy for 48 hours has no influence on bilirubin-albumin binding capacitiy and affinity. Auditory evoked repsonse (ABR) changes in the form of I, III, and IV wave reduction are associated with brainstem and cerebellum bilirubin deposition. Since early detection of bilirubin neurotoxicity is promising for improving outcome for high risk neonates, ABR and other electrophysiological measure will be useful.