Introduction: Hyperbilirubinemia is one of the commonest problems that can occur in newborns. The vasopressin-like action of oxytocin causes osmotic swelling of erythrocytes leading to decreased deformability and hence more rapid destruction with resultant neonatal hyperbilirubinemia (NNH). Objectives: To determine dosage and duration of oxytocin for mother during augmentation of labor. To determine the incidence of neonatal hyperbilirubinemia in mothers given oxytocin and those in spontaneous labor. To find association between maternal oxytocin augmentation and neonatal hyperbilirubinemia. Materials & method: 306 full-term parturients with normal vaginal delivery from January 2017 to June 2018 were selected after ruling out exclusion criteria. Group A: 153 term babies of oxytocin augmented labor & Group B: 153 term babies of spontaneous labor. Oxytocin dosage was 5 units in 500 ml normal saline, @ 5 mIU/min and increased by 5 mIU/min half hourly until effective uterine contractions were attained. The total duration and volume of oxytocin infused were recorded in each subject. In neonatal period serum bilirubin was measured by trans cutaneous bilirubinometer on day 1 and day 3. Results: Incidence of NNH requiring phototherapy in Group A was 38% and in Group B was 18% and the difference between 2 groups were statistically significant (p-value = 0.0001 ). The cut-off duration and volume of oxytocin infusion for a statistically significant increase of NNH was 292.5 minutes (p-value 0.0001) and 5101 mIU (p-value 0.0001) respectively. Conclusion: Oxytocin is an important therapeutic agent in labor and probably its use cannot be stopped and thus its effect on erythrocytes also cannot be prevented. Oxytocin can produce neonatal hyperbilirubinemia as evidenced by this study and therefore it would be logical to prevent the hyperbilirubinemia by reducing the dose of oxytocin and by its selective use.