In jaundice that developed in association with sepsis in early infancy, elevation of bilirubin levels in serum occurred in both the direct- and indirect-reacting fractions. The regurgitative nature of the jaundice, with retention of conjugated bilirubin, served to distinguish this condition from physiologic jaundice. Jaundice in the nine cases under study was most often associated with coliform sepsis, particularly in the presence of acute pyelonephritis, but other bacteria and other infectious processes were also implicated. The most consistent histopathologic observation in the liver was bile stasis, indicating an inability on the part of the cell to excrete conjugated bilirubin. This was accompanied by the intracellular accumulation of unconjugated bilirubin and by "toxic" cellular alterations, such as giant-cell transformation. These findings have been interpreted as evidence of primary hepatocellular damage.