Our aims were to estimate the efficacy of hospital phototherapy for neonatal jaundice and the number needed to treat to prevent one infant from reaching the exchange transfusion level. From a cohort of 281 898 infants weighing > or =2000 g born at > or =35 weeks' gestation at 12 Northern California Kaiser hospitals from 1995 to 2004, we identified 22 547 who had a "qualifying total serum bilirubin level" within 3 mg/dL of the American Academy of Pediatrics 2004 guideline phototherapy threshold. We used multiple logistic regression to estimate the efficacy of hospital phototherapy within 8 hours at preventing the bilirubin level from exceeding the 2004 guideline's exchange transfusion threshold within 48 hours. We combined this efficacy estimate with other predictors of risk to estimate the numbers needed to treat at different values of covariates. Of the 22 547 eligible newborns, 5251 (23%) received hospital phototherapy within 8 hours of their qualifying bilirubin level. Only 354 (1.6%) ever exceeded the guideline exchange transfusion threshold; 187 (0.8%) did so within 48 hours. Among infants who did not have a positive direct antiglobulin test, hospital phototherapy within 8 hours was highly effective (adjusted odds ratio, 0.16; 95% confidence interval, 0.07-0.34). For infants with bilirubin levels 0-0.9 mg/dL above the phototherapy threshold, the estimated number needed to treat at mean values of covariates was 222 (95% CI: 107-502) for boys and 339 (95% CI: 154-729) for girls, ranging from 10 (95% CI: 6-19) for <24-hour-old, 36-week gestation boys to 3,041 (95% CI: 888-11 096) for > or =3-day-old 41-week girls. Hospital phototherapy was less effective for infants direct antiglobulin test-positive infants (adjusted odds ratio 0.55; 95% CI: 0.21-1.45; P = 0.01 for the direct antiglobulin test x phototherapy interaction). While hospital phototherapy is effective, the number needed to treat according to current guidelines varies considerably across different infant subgroups.