Objective This review was conducted to evaluate the efficacy of light-emitting diode (LED) phototherapy as compared with the conventional phototherapy in neonates with unconjugated hyperbilirubinemia and their adverse effects. Study Design We searched the following databases right from their inception till April, 2021: MEDLINE, EMBASE, Cochrane Library, and LILACS. Randomized clinical trials (RCTs) comparing the LED phototherapy with other light sources, which enrolled newborns (term and preterm) with unconjugated hyperbilirubinemia were included. Results We included 21 articles in this review. The treatment with the LED light therapy had a lower failure rate as compared with the non-LED one (RR 0.60, 95% CI 0.39-0.94). The mean duration of phototherapy was significantly shorter in the group with the LED light source as compared with the one with the non-LED light source (mean difference [hours] -8.07, 95% CI -8.45 to -7.68), regardless of the type of non-LED units. However, the rate of bilirubin showed a comparable decline (mean difference [mg/dL/h] 0.01, 95% CI -0.00, 0.03) in both the light sources, irrespective of irradiance or distance. No studies reported primary outcomes related to the neurotoxicity effects of hyperbilirubinemia in neonates. The LED light devices caused a significantly higher risk of hypothermia. Neonates were at a lower risk of developing hyperthermia and skin rash with the LED light therapy. Conclusion Our findings provide support for the use of LED light source phototherapy due to its better clinical efficacy, which is evidenced by its shorter duration and lower rate of treatment failure, as compared with the non-LED light sources. Key Points The efficacy of phototherapy is dependent on specific characteristics of light sources of phototherapy devices. LED phototherapy demonstrated better efficacy with shorter duration and lower rate of treatment failure. Adverse effects of phototherapy devices such as hypothermia, hyperthermia, and skin rash should be monitored.