Background: Jaundice is one of the commonest findings in the early neonatal period. About 75% of newborns develop Jaundice in first week of life. Aim:To study the developmental milestones in preterm neonates managed with exchange transfusion in Government Hospital.Materials &Methods: 30 newborn babies treated with exchange transfusion were studied retrospectively for a period of 2 years.Results: All the 30 neonates showed development of milestones at appropriate age. Four neonates showed abnormal otoacoustic emission at 3 months which was normal at 6 months.Conclusion: Hyperbilirubinemia in the neonatal period is a condition which may be overlooked or delay in recognition. Standard protocols can be followed in Government hospitals to prevent neonatal complications related to hyperbilirubinemia.