Hyperbilirubinemia is a common and, in most cases, a benign problem in neonates. Conventional treatment for severe indirect hyperbilirubinemia consists of phototherapy and exchange transfusion. Several drugs like Metalloporphyrins, D-pencillamine, henobarbital, activated charcoal, clofibrate, and bile salts have been used for the treatment of indirect hyperbilirubinemia, but none of them has yet been evaluated sufficiently to allow routine application. To assess the additive effect of Ursodeoxycholic Acid on reducing indirect hyperbilirubinemia in neonates under phototherapy. This study is a randomized controlled trial on neonates with indirect hyperbilirubinemia who required phototherapy; admitted to neonatal care unit of Sulaimani Pediatric Teaching Hospital during the period of February 2014 to February 2015. 200 neonates were enrolled in this study and randomly divided into two groups, group A (n=100) received Ursodiol 10 mg/kg/day orally divided 12 hourly in addition to phototherapy, while group B (n=100) received only phototherapy. Total serum bilirubin levels were measured every 12 hours until reaching to below 10mg/dl and then phototherapy was stopped. The two groups were compared regarding total serum bilirubin at different time points using t-test for comparison of means and Chi-square test for contingency tables, and (p<0.05) was considered statistically significant. The mean total serum bilirubin in group A was 11.7±1.5, 8.8±1.1, and 7.6±0.9 mg/dl at 12, 24 and 36 hours respectively, after the beginning of Ursodiol and phototherapy, while these measures were 14.6±1.6, 13.2±5.8, 10.2±1.4 and 9.1±0.8 mg/dl at 12, 24, 36 and 48 hours respectively in group B (p < 0.001), and the duration of phototherapy in both group A and group B were 23.2±5.6 and 41.1±7.2 hours respectively (p< 0.001). Ursodeoxycholic Acid has an additive effect if used with phototherapy in the neonate with indirect hyperbilirubinemia and reduces the time needed for phototherapy.