Neonatal jaundice is caused by increased bilirubin levels in newborns. There are two main types - physiological jaundice which appears after 24 hours and is self-limiting, and pathological jaundice which appears earlier and requires treatment. Common causes of pathological jaundice include blood group incompatibility, G6PD deficiency, breast milk jaundice, and infections. Treatment depends on bilirubin levels but may include phototherapy, IVIG, exchange transfusion, or drugs like phenobarbital. It is important to monitor jaundiced infants for signs of kernicterus or permanent brain damage from high bilirubin levels.