The Facts
Jaundice is a symptom of many medical problems but it is most often associated with conditions of the liver or the gallbladder. Jaundice causes yellow skin and eyes because of an excess amount of the bile pigment bilirubin in the fat layer under the skin. Either the body is producing too much, or it's not getting rid of it fast enough.
In addition to being caused by problems with the liver, jaundice can also occur among newborns, particularly premature babies. Jaundice that occurs at the time of birth generally disappears within days, but some babies require phototherapy treatment (special lights that help break down bilirubin). In this case, the yellowing of the skin is not due to liver or gallbladder disease.
Instead, jaundice is caused by the fact that fetuses have a different kind of red blood cell than adults. They are just getting rid of these cells around the time of birth, which releases a lot of bilirubin. Newborns also temporarily lack sufficient amounts of the enzymes that break down bilirubin. With time, the liver cells mature and are able to rid the body of excess bilirubin, and the jaundice will disappear.