Biological and signaling events that connect developmentally induced hyperbilirubinemia to bilirubin-induced neurological dysfunction (BIND) and CNS toxicity in humans are poorly understood. In mammals, UDP-glucuronosyltransferase 1A1 (UGT1A1) is the sole enzyme responsible for bilirubin glucuronidation, a rate-limiting step necessary for bilirubin metabolism and clearance. Humanized mice that express the entire UGT1 locus (hUGT1) and the UGT1A1 gene, develop neonatal hyperbilirubinemia, with 8-10% of hUGT1 mice succumbing to CNS damage, a phenotype that is presented by uncontrollable seizures. We demonstrate that neuroinflammation and reactive gliosis are prominent features of bilirubin brain toxicity, and a disturbed redox status resulting from activation of NADPH oxidase is an important contributing mechanism found in BIND. Using knock-out mice and primary brain cells, we connect a key pattern recognition receptor, Toll-like receptor 2 (TLR2), to hyperbilirubinemia-induced signaling. We illustrate a requirement for TLR2 signaling in regulating gliosis, proinflammatory mediators, and oxidative stress when neonatal mice encounter severe hyperbilirubinemia. TLR2-mediated gliosis strongly correlates with pronounced neuroinflammation in the CNS with up-regulation of TNFα, IL-1β, and IL-6, creating a pro-inflammatory CNS environment. Gene expression and immunohistochemistry staining show that hUGT1/Tlr2(-/-) mice fail to activate glial cells, proinflammatory cytokines, and stress response genes. In addition, bilirubin-induced apoptosis was significantly enhanced by blocking TLR2 signaling indicating its anti-apoptotic property. Consequently, a higher neonatal death rate (57.1%) in hUGT1/Tlr2(-/-) mice was observed when compared with hUGT1 mice (8.7%). These results suggest that TLR2 signaling and microglia neuroinflammation are linked to a repair and/or protection mode against BIND.