Objective To investigate the diagnostic values of prealbumin (PAB) and retinol-binding protein (RBP) for liver damage caused by mild or severe asphyxia. Methods A retrospective analysis was performed on 185 neonates (including 84 premature infants and 101 full-term infants) with asphyxia. Based on the Apgar score, they were divided into two groups:mild asphyxia group (n=150) and severe asphyxia group (n=35). The levels of PAB, RBP, alanine aminotransferase (ALT), and aspartate aminotransferase (AST) were measured and compared. Their diagnostic values for liver damage were evaluated by ROC curve analysis. Results The premature infants in the severe asphyxia group had significantly higher AST level and significantly lower levels of PAB and RBP than those in the mild asphyxia group (P < 0.05). The full-term infants in the severe asphyxia group had a significantly lower PAB level than those in the mild asphyxia group (P < 0.05). After treatment, the PAB level was significantly improved in the premature infants in the severe asphyxia group and in the full-term infants in both mild and severe asphyxia group (P < 0.05). The full-term infants in the mild asphyxia groups also showed a significant improvement in AST level (P < 0.05). The ROC curve analysis showed that PAB had a good sensitivity and specificity for identifying liver damage caused by mild or severe asphyxia in full-term and preterm infants. Conclusions PAB can be used as an indicator of liver damage caused by asphyxia in neonates, and can be used to assess the degree of asphyxia.