Exchange blood transfusion involves removing an infant's blood and replacing it with donor blood in small aliquots to treat conditions like jaundice. It was pioneered in the 1920s and involves cannulating the umbilical vein to withdraw the infant's blood while infusing donor blood. Indications include severe jaundice, Rh sensitization, and other conditions. The donor blood must be the right blood type and crossmatched to avoid incompatibility reactions. Partial or full volume exchanges can be done, and careful monitoring is needed due to risks like infection, electrolyte imbalances, and cardiac complications.