To investigate the importance of bacterial infection in the formation of free fatty acids found in brown pigment gallstones, free fatty acids and phospholipase activity in hepatic bile, with or without the presence of bacterial infection, were compared. The concentration of free fatty acids in bile with bacterial infection [0.467 ± 0.447 mg per ml (mean ± S.D.)] was significantly higher than when bacterial infection was absent (0.073 ± 0.041 mg per ml; p < 0.01). However, there was no significant difference in the composition of free fatty acids in hepatic bile when bacterial infection was present. Biliary phospholipase activity was determined by counting [14C] palmitic acid released from [14C]dipalmitoyl phosphatidylcholine that was incubated with native bile. The biliary phospholipase activity was significantly higher when bacterial infection was present. Furthermore, a positive correlation (p < 0.001) was found between the activity of biliary phospholipases and the concentration of free fatty acids in hepatic bile. Most bacterial strains isolated from bile were shown to have both phospholipase A1 and A2 activity. On the other hand, human pancreatic juice and human gallbladder epithelial cells contained mainly phospholipase A2. Since fatty acids in the gallstone are mainly palmitic acid and must have been cleaved from first position in the biliary phosphatidylcholine molecule, bacterial phospholipase A1 seems to play an important role in the formation of calcium palmitate found in brown pigment gallstones.