Bile lakes develop after hepatic portoenterostomy in some patients with biliary atresia, and have been regarded as an indication of poor prognosis. We reported that bile lakes have no epithelium of the bile duct on their wall, and are surrounded by bile ducts; however, the mechanism of bile lake formation is little known. We investigated histologically how bile ducts are formed using whole removed liver, and the characteristics of bile ducts around bile lakes. From April 1980 to July 2006, we encountered 84 patients with biliary atresia. Bile lakes were analyzed histologically in 11 patients who underwent liver transplantation in our hospital. Bile lakes had a fibrotic cyst wall and lacked epithelia. In most cases, bile stasis, calculi formation, damaged bile ducts, and invasion of inflammatory cells were observed around the bile lakes. Bile ducts around bile lakes were not stained by CD56, but bile ducts around liver lobuli were stained by CD56. The present study speculates that bile lakes would arise from original bile ducts, which are damaged, and fuse together after calculi are formed in bile ducts.