Background & Aims: The mouse mdr2 gene encodes a P-glycoprotein expressed in the hepatocanalicular membrane. Inactivation of this gene causes lack of biliary phospholipid and cholesterol secretion and nonsuppurative cholangitis. The aim of this study was to investigate the role of bile salt hydrophobicity in induction of liver pathology in mdr2 (-/-) mice. Methods: Mice (+/+) wild type or (-/-) knockout for the mdr2 gene were fed with either purified control diet or this diet supplemented with cholate (0.1%) or ursodeoxycholate (0.5%) for 3, 6, or 22 weeks after weaning. Liver histology was semiquantitatively scored. Results: Each mouse fed bile acid became the major constituent of the bile salt pool. The cholate diet during 22 weeks induced only very mild liver pathology in (+/+) mice. By contrast, liver histology had already deteriorated after 3 weeks in the (-/-) mice and caused pronounced inflammatory nonsuppurative cholangitis and fibrosis in the 75% of mice that survived. Dietary ursodeoxycholate had no effect on histology in (+/+) mice but improved liver pathology significantly in (-/-) mice compared with purified control diet; the decrease of ductular proliferation and portal inflammation was most prominent after 22 weeks. Conclusions: The cholangiolitis and its sequelae in the mdr2 knockout mice depend on bile salt hydrophobicity.