Summary: Neonatal hepatitis is a nonspecific term that may include a variety of disease entities. Two patients are presented who developed jaundice in the neonatal period and progressive hepatosplenomegaly. The infants were initially felt to have “neonatal hepatitis” but were subsequently found to have Niemann‐Pick disease. Biochemical investigation revealed normal levels of sphingomyelinase activity in leukocytes and liver but diminished levels in cultured skin fibroblasts, compatible with Niemann‐Pick type C.