Around 2-6% of term or late preterm neonates receive phototherapy for hyperbilirubinemia. Standard treatment today is overhead phototherapy. A new device has been developed, the BiliCocoon, where the neonates are "wrapped" presumably making them more comfortable. The aim was to compare the efficacy and performance of the BiliCocoon with overhead LED phototherapy. A randomized open-label multicenter trial in three Danish neonatal units. Healthy hyperbilirubinemic neonates, gestational age ≥33 weeks and postnatal age 24 h to 14 days were randomized to 24 hours' of treatment with BiliCocoon or overhead blue LED phototherapy with an equal level of irradiance. A mixed effect model with random effect by center was used to compare the percentage decrease in total serum bilirubin (TSB) between the treatments. Totally 83 neonates were included. Mean TSB reduction in the BiliCocoon group (N = 42), adjusted for baseline TSB, was significantly lower than in the overhead LED group (N = 41), 29% vs. 38% (p-value < 0.01). Overall difference in temperature by treatment (BiliCocoon vs overhead) was 0.70 [0.37; 1.02] °C, p-value < 0.01. Bilirubin reducing efficacy of BiliCocoon was lower than that of overhead phototherapy, but it was sufficient for nearly all neonates during 24 hours of treatment. The BiliCocoon has a bilirubin reducing efficacy, sufficient for almost all neonates during 24 hours of phototherapy. The BiliCocoon does not have an equal bilirubin reducing efficacy as overhead phototherapy. The duration of light exposure was longer for the neonates treated in the BiliCocoon. A few neonates can be exclusively breastfed in the BiliCocoon throughout the treatment. The reason for stopping breastfeeding in the BiliCocoon was most often, that the neonates developed hyperthermia.