Subgaleal hematomas (SGHs) in neonates may result from trauma to the scalp sustained during delivery. In the majority of cases, these lesions will resolve on their own without serious or long-term consequences. The authors report on a case of SGH resulting in hypotension, anemia, coagulopathy, and eventually direct hyperbilirubinemia in a neonate. After several weeks of medical management failed to resolve the hyperbilirubinemia, surgical evacuation of the clot was undertaken and yielded favorable results. The direct bilirubinemia in this case was believed to be the result of an overload of iron to the hepatocytes. It is the authors' contention that the evacuation of the hematoma resulted in a reduction in the amount of iron being presented to the liver for metabolism and significantly contributed to this patient's recovery.