OBJECTIVE To determine the initial Brainstem Auditory Evoked Response (BAER) abnormalities in neonates with hyperbilirubinemia and the possible reversibility of abnormal BAER after therapy. METHODS Prospective cohort study. METHODS Tertiary care hospital. METHODS 30 term neonates with hyperbilirubinemia (S. bilirubin < 15 mg/dl) as cases and 25 normal term neonates as controls. METHODS Duration of study was from August 1995 to August 1996. BAER were recorded before therapy at peak hyperbilirubinemia, after therapy, and the age of 2-4 months using electric response audiometer (Nihon Neuropack Four Machine). Denver Development Screening Test (Denver II) was performed at 1 year of age. RESULTS Seventeen out of thirty (56.7%) neonates with hyperbilirubinemia showed abnormalities on initial BAER. Commonest abnormality seen was raised threshold of wave V in 12 neonates (40%). Other abnormalities observed were absence of all waves at 90 dB (23.3%), prolongation of latencies of various waves (26.7%) and prolongation of various intervals (26.7%). Abnormalities in BAER correlated significantly with bilirubin level. After therapy abnormalities reverted back to normal in 10 cases but persisted in 7 out of 17 (41.17%) cases with initial abnormal BAER. Development screening at 1 yr was abnormal in 3 infants all of whom had persistent abnormalities in BAER. CONCLUSIONS Serial BAER is a useful, non invasive tool to detect neurodevelopment delay secondary to neonatal hyperbilirubinemia.