Biliary atresia (BA) is the most frequent identifiable cause of neonatal cholestasis and the majority of patients will need liver transplantation for survival. Despite surgical intervention with the Kasai portoenterostomy, significant fibrosis and cirrhosis develops early in life. An increased understanding of what causes this inflammatory fibrosing cholangiopathy will lead to therapies aimed at protecting the intrahepatic biliary system from immune-mediated damage. This review focuses on studies pertaining to the role of the adaptive immune response in bile duct injury in BA, including cellular and humoral immunity. The neonatal presentation of BA begs the question of what are potential modifications of unique aspects of the neonatal immune system that "sets the stage" for the progressive biliary disease? Throughout this article, characteristics of the neonatal immune response are outlined and theories as to how alterations of this response could contribute to the pathogenesis of BA are discussed. These include aberrant Th1 and Th17 responses, deficiencies in regulatory T cells, activation of humoral immunity and autoimmunity. In order to advance our understanding of the etiology of BA, future studies should focus on those unique aspects of the neonatal immune system that have gone awry, as detailed throughout this review.