Bile acids, the water-soluble, amphipathic end products of cholesterol metabolism, are involved in liver, biliary, and intestinal disease. Formed in the liver, bile acids are absorbed actively from the small intestine, with each molecule undergoing multiple enterohepatic circulations before being excreted. After their synthesis from cholesterol, bile acids are conjugated with glycine or taurine, a process that makes them impermeable to cell membranes and permits high concentrations to persist in bile and intestinal content. The relation between the chemical structure and the multiple physiological functions of bile acids is reviewed. Bile acids induce biliary lipid secretion and solubilize cholesterol in bile, promoting its elimination. In the small intestine, bile acids solubilize dietary lipids promoting their absorption. Bile acids are cytotoxic when present in abnormally high concentrations. This may occur intracellularly, as occurs in the hepatocyte in cholestasis, or extracellulary, as occurs in the colon in patients with bile acid malabsorption. Disturbances in bile acid metabolism can be caused by (1) defective biosynthesis from cholesterol or defective conjugation, (2) defective membrane transport in the hepatocyte or ileal enterocyte, (3) defective transport between organs or biliary diversion, and (4) increased bacterial degradation during enterohepatic cycling. Bile acid therapy involves bile acid replacement in deficiency states or bile acid displacement by ursodeoxycholic acid, a noncytotoxic bile acid. In cholestatic liver disease, administration of ursodeoxycholic acid decreases hepatocyte injury by retained bile acids, improving liver tests, and slowing disease progression. Bile acid malabsorption may lead to high concentrations of bile acids in the colon and impaired colonic mucosal function; bile acid sequestrants provide symptomatic benefit for diarrhea. A knowledge of bile acid physiology and the perturbations of bile acid metabolism in liver and digestive disease should be useful for the internist.