Background: Early detection and prompt management of neonatal jaundice are critical in reducing neonatal morbidity and mortality. Effective treatment strategies include close monitoring, phototherapy, exchange transfusion, and addressing underlying causes. This study aimed to identify the prevalent causes of unconjugated hyperbilirubinemia in neonates and to assess their immediate clinical outcomes. Methodology: This prospective hospital-based study was conducted at Ahmed Gasim Teaching Hospital from January to June 2022. A total of 103 neonates who met the inclusion criteria were enrolled. Data were analyzed using SPSS version 26. Results: The study included 103 neonates, with a mean age of 7.6 ± 4.8 days (range: 1–28 days); 56 (54.4%) were male. The mean gestational age was 38.5 ± 1.9 weeks, with 91 (88.3%) being full-term and 12 (11.7%) being preterm. The mean age at onset of jaundice was 3.05 ± 1.8 days (range: 1–10 days). Mean total bilirubin was 14.4 ± 13.9 mg/dL, and mean direct bilirubin was 0.97 ± 0.60 mg/dL. The most common causes of unconjugated jaundice were sepsis (86, 83.5%), ABO incompatibility (25, 24.3%), dehydration (14, 13.6%), and Rh incompatibility (13, 12.6%). Treatments included phototherapy (72, 69.9%), medications (68, 66.0%), conservative management (32, 31.1%), and exchange transfusion (7, 6.8%). Most neonates (91, 88.3%) were discharged in good condition, while 12 (11.7%) were discharged against medical advice. No cases of kernicterus or mortality were reported. Conclusion: Sepsis and ABO incompatibility were the leading causes of neonatal unconjugated hyperbilirubinemia. Most neonates responded well to treatment and were discharged in good condition.