To establish the role of the biliary epithelium in bile formation, we studied several aspects of biliary physiology in control rats and in rats with ductular cell hyperplasia induced by a 14-d extrahepatic biliary obstruction. Under steady-state conditions, spontaneous bile flow was far greater in obstructed rats (266.6 ± 51.9 μ/min per kg) than in controls (85.6 ± 10.6 μl/min per kg), while excretion of 3-hydroxy bile acids was the same in the two groups. Infusion of 10 clinical units (CU)/kg per h secretin produced a minimal choleretic effect in controls (+3.8±1.9 μl/min per kg) but a massive increase in bile flow in the obstructed animals (+127.8 ± 34.9 μl/min per kg). Secretin choleresis was associated with an increase in bicarbonate biliary concentration and with a decline in [14C]mannitol bile-to-plasma ratio, although solute biliary clearance significantly increased. Conversely, administration of taurocholate (5 μmol/min per kg) produced the same biliary effects in control rats and in rats with proliferated biliary ductules. In the obstructed animals, the biliary tree volume measured during taurocholate choleresis (67.4 ± 15.8 μl/g liver) was significantly greater than that determined during the increase in bile flow induced by secretin (39.5 ± 10.4 μl/g liver). These studies indicate that, in the rat, the proliferated bile ductules/ducts spontaneously secrete bile and are the site of secretin choleresis. Furthermore, because the proliferated cells expressed phenotypic traits of bile ductular cells, our results suggest that whereas under normal conditions the biliary ductules/ducts in the rat seem to contribute little to bile formation, secretion of water and electrolytes is a property of biliary epithelial cells.