Bile acids, which are synthesized in the liver from cholesterol, are important in the production of bile flow, excretion of cholesterol, and intestinal digestion and absorption of fats and fat-soluble vitamins. Increases and/or alterations in concentrations of bile acids in serum are specific and sensitive indicators of hepatobiliary disorders. Synthesis of bile acids in hepatocytes involves steps in endoplasmic reticulum, cytosol, mitochondria, and peroxisomes. Other important hepatocellular processes involving bile acids include active uptake by the basolateral membrane, intracellular transport, P-450-mediated conjugations and hydroxylations, and canalicular secretion. Hydrophobic bile acids produce hepatotoxicity in vivo and in vitro. In experimental and epidemiologic studies, some of these forms have been identified as causative agents in the development of colon and liver (experimental only) cancer. Conversely, several hydrophilic forms, primarily ursodeoxycholic acid, have demonstrated cytoprotective properties in a variety of clinical and experimental hepatobiliary diseases and disorders. Because bile acids can have dramatically different properties and effects, determination of mechanisms of action of these compounds has become an active area of research. Primary isolated hepatocytes provide an opportunity to investigate bile acid-related functions and effects in well-designed, carefully controlled studies. Short-term cultures have been used to study a variety of issues related to bile acids, including cytotoxicity, synthesis, and hepatocellular processing. With these systems, however, many functions of mature hepatocytes, including those pertaining to bile acids, can be lost when cultures are maintained for more than several days. Recent developments in culture techniques permit long-term maintenance of functionally stable, differentiated cells. Pertaining to bile acid research, these systems remain to be fully characterized but, in appropriate situations, they should provide important alternatives to in vivo studies and short-term in vitro assays.