Although biliary atresia is characterized by luminal obstruction of the extrahepatic bile ducts, the etiology and the pathophysiology of the liver are still controversial. The prognosis of biliary atresia has been improved after the introduction of Kasai's hepatic portoenterostomy, but there are still many problems to be solved in the treatment of this disease. Successful results of hepatic portoenterostomy depend on early diagnosis and operation, adequate operative technique, prevention of postoperative cholangitis, and precise postoperative management. However, we are on the verge of a new era in the therapy of biliary atresia combining portoenterostomy with liver transplantation.