The secretory compartment for biliary lecithin and cholesterol secretion probably resides in the smooth endoplasmic reticulum of the hepatocyte. The secretory compartment for bile salts lies predominantly in the enterohepatic circulation which fluxes bile salts continuously through the smooth endoplasmic reticulum compartment and extracts lipids for secretion into bile. Most of bile lecithin is newly synthesized by the liver; most of bile cholesterol is derived from extrahepatic sources. Both cholesterol and lecithin secretion are coupled to bile salt secretion and describe output curves which can be fitted by rectangular hyperbolae: since bile salt secretion is a linear function of input, the relative proportions of cholesterol to bile salts plus lecithin in bile increase at low bile salt outputs. In health, an adequate bile salt (+ lecithin) secretion coupled with normal cholesterol secretion maintains the relative composition of bile in a stable state: fasting compositions usually lie within the micellar zone or metastable supersaturated zone of a triangular coordinate-phase diagram plot. In cholesterol gallstone disease, mean bile salt (+ lecithin) secretion rates are subnormal and/or mean cholesterol secretion rates are supranormal, especially in the fasting state. If individuals are obese there is also enhanced hypersecretion of biliary cholesterol. Either or both secretory defects lead to an elevation and persistence of cholesterol supersaturation of bile. The physical state of the secreted lipids in bile is complex and fluctuant, and probably involves vesicle structures and mixed micelles at high water and cholesterol concentrations and predominantly micellar structures at low water and cholesterol concentrations. In lithogenic bile, the physical state, proportions and nucleation potential of the lipid aggregates are probably different. Further, the respective proportions of biliary mixed micelles and vesicles are probably influenced by the mean hydrophilicity of the bile salt pool.