Concentrations of ammonia in blood from the umbilical vein have been determined during the course of 20 exchange transfusions on 16 infants. One of these infants subsequently died of kernicterus and another died with liver damage and intracranial hemorrhage. Only these two infants had concentrations of ammonia in blood from the umbilical vein greater than 2 µg/ml during exchange transfusion when half of the blood had been administered. The only other infants with significantly elevated concentrations of ammonia in blood from the umbilical vein had siblings who had died of kernicterus. A steady but gradual rise in the content of ammonia in stored blood has been shown to occur during storage. There is no relation between the content of ammonia in stored blood and the concentration of ammonia in the blood of the patient during exchange transfusion. It is postulated that the ammonemia of the patient with impairment of liver function due to hyperbilirubinemia causes a failure of energy metabolism of nerve cells, resulting in an increased permeability of the cells to bilirubin. Once the cells are stained, the lesion is irreversible.