Rh incompatibility occurs due to a difference in Rh factor between a pregnant woman and her child. Children can be Rh positive even if their mothers are Rh negative, if they inherit the protein from their fathers. During pregnancy, red blood cells from the unborn baby can cross the placenta into the mother's blood. If the mother is Rh negative, her immune system treats the Rh positive fetal cells as foreign invaders. The mother's body produces antibodies against the fetal blood cells. These antibodies can cross the placenta into the developing baby. These antibodies destroy the baby's circulating red blood cells, breaking them down. The breakdown of the baby's red blood cells leads to bilirubin production and jaundice in the baby.

The level of bilirubin in the baby's blood can range from mild to dangerously high. The risk is highest near the time of delivery or during delivery. Unless there has been a miscarriage or abortion, mothers' first babies are usually unaffected by this incompatibility because it takes time for the mother to develop antibodies. However, all subsequent Rh positive children may be negatively affected by Rh incompatibility.