Cholestasis in preterm infants has a multifactorial etiology. Risk factors include degree of prematurity, lack of enteral feeding, intestinal injury, prolonged use of parenteral nutrition (PN), and sepsis. Soy-based parenteral lipid emulsions have been implicated in the pathophysiology of PN-associated liver injury. Inflammation plays an important role. Medical therapies are used; however, their effects have not consistently proven effective. Evaluation of cholestasis involves laboratory work; direct bilirubin levels are used for diagnosis and trending. Adverse outcomes include risk for hepatobiliary dysfunction, irreversible liver failure, and death. Early enteral feedings as tolerated is the best way to prevent and manage cholestasis.