Whole-body cooling, or therapeutic hypothermia, is increasingly becoming the standard of treatment for moderate to severe neonatal encephalopathy because it reduces neurodevelopmental disabilities and mortality in term neonates. Subcutaneous fat necrosis (SCFN) of the newborn has been identified as a potential side effect of birth asphyxia. In recent literature, there has been an increase in SCFN in infants who received whole-body cooling in treatment of neonatal encephalopathy. Subcutaneous fat necrosis is a rare and self-limiting disorder of the adipose tissue that usually occurs in full-term or postterm infants. The disorder can appear days to weeks after birth and spontaneously resolves within weeks to months without any intervention but can have potential complications. With the increasing use of whole-body cooling in the neonate population, clinicians should be aware of SCFN as a possible side effect. This article describes a case of SCFN occurring after whole-body cooling on a term infant with perinatal asphyxia.