Rh incompatibility occurs when an Rh-negative mother carries an Rh-positive baby. This can lead to the mother's immune system attacking the baby's red blood cells, causing hemolysis. This condition can result in severe anemia, jaundice, and even heart failure in the fetus or newborn. Prophylactic measures, such as Rh immunoglobulin (RhIg) injections, are often administered to prevent sensitization.