Infants with very low birth weight (VLBW) are at increased risk of cholestasis when compared with older infants and children. Factors associated with this increased risk of cholestasis include immaturity of the biliary excretory system, a diminished immune response to sepsis, an increased incidence of necrotizing enterocolitis and short bowel syndrome, as well as an increased exposure to parenteral nutrition (PN). The current literature on cholestasis in VLBW infants and the factors that mediate the initiation and progression of cholestatic liver damage is reviewed. A protocol for managing infants with cholestatic jaundice is presented, and a case report is included that shows use of the protocol to normalize the bilirubin in a VLBW infant with severe cholestatic jaundice.