Cleavage of the alpha-methene bridge of heme by membrane-bound heme oxygenase yields equimolar amounts of biliverdin, carbon monoxide, and reduced iron. Biliverdin is catalyzed by biliverdin reductase to bilirubin. The process occurs in all nucleated cells except mature anucleated red blood cells. Neonates in whom bilirubin production is increased tend to have higher bilirubin concentrations, and excessive bilirubin production or impairment of elimination causes dramatic deviations from the hour-specific nomogram that can be seen as “jumping” percentile tracks early in the postnatal period or later in the first week after birth. After formation, bilirubin diffuses into the circulation. In the absence of conjugates, the total bilirubin concentration in plasma is the sum of bilirubin bound to albumin plus a minimal amount of free bilirubin. Bilirubin is excreted more slowly in newborns than in adults. Although no clinical tests can measure bilirubin uptake and conjugation by the liver, an elevated hour-specific total bilirubin value when bilirubin production is normal or decreasing is a sign of impaired or abnormally delayed bilirubin excretion. The accuracy and precision of clinical laboratory total bilirubin measurements are a concern, and studies are underway to assess whether measurements of free bilirubin, the bilirubin-binding constant, the bilirubin:albumin ratio, or albumin binding capacity might improve the ability to identify infants at greater risk for bilirubin-induced neuroinjury rather than simply those at greater risk for having a higher bilirubin concentration.