Blue light has been widely used for the treatment of neonatal hyperbilirubinemia since the 1950s. Neonatal phototherapy can decrease plasma unconjugated bilirubin level, thus preventing bilirubin encephalopathy, and greatly reduces the exchange transfusion rate. Generally, it is accepted that the side effects of neonatal phototherapy are not serious and seem to be well controlled, however recent research has provided new evidence. The short-term side effects of phototherapy include interference with maternal-infant interaction, imbalance of thermal environment and water loss, electrolyte disturbance, bronze baby syndrome and circadian rhythm disorder. In addition, phototherapy may be associated with some long-term side effects such as melanocytic nevi and skin cancer, allergic diseases, patent ductus arteriosus and retinal damage. Therefore, it is necessary to develop evidence-based guidelines, new light devices and alternative agents, as well as individualized treatments, to minimize the side effects of phototherapy.