The site of lesion in hearing loss following neonatal hyperbilirubinemia is unclear. Histopathological studies have implicated the brain stem auditory nuclei while other investigations have hinted at a lesion in the cochlea. In order to clarify this issue, attempts were made to record responses from the auditory pathway in 13 patients with hearing loss following neonatal hyperbilirubinemia. The neural response from the auditory nerve was absent in 11 of the 13 patients and present only in response to high intensity stimuli in 2 patients. However, the response of the cochlear hair cells (cochlear microphonic potential) was present in 9 of the 13 patients. In most other cases of sensorineural hearing loss, with no history of hyperbilirubinemia, the hair cell response was absent. This is functional evidence for auditory nerve damage in cases of hearing loss following neonatal hyperbilirubinemia while the hair cells are spared.