Obstructive cholestasis induced in animals at the level of the lobar and common bile ducts is known to be reversible with time. This study was conducted not only to test the hypothesis that formation of bile duct collaterals is responsible for the recovery of biliary obstruction but also to assess the potential of hepatobiliary agent-enhanced magnetic resonance imaging for visualizing cholestasis. A total of 52 rats were divided into three groups with selective biliary obstruction, total biliary obstruction and sham surgery. We studied the evolution of cholestasis by correlating microcholangiographic, histological findings with the results of liver tests and hepatobiliary agent-enhanced magnetic resonance imaging. Lobar cholestasis undetected by liver tests but seen on magnetic resonance imaging as a difference between ligated and unligated lobes, occurred in 15 out of 20 rats subjected to selective biliary obstruction within 48 hr after ligation, and recovered later on as a result of the development of bile duct collaterals. Five rats failed to show local cholestasis as a result of the existence of interlobar accessory bile channels. All 18 total biliary obstruction-treated rats were cholestatic soon after ligation, as confirmed by high serum bilirubin and alkaline phosphatase levels and as documented by poor liver enhancement on magnetic resonance imaging. Cholestasis recovered within 4 wk with normalization of liver enhancement on magnetic resonance imaging as a result of the formation of bile duct collaterals (as demonstrated by microcholangiographic and histological study). Bile duct collateral formation is responsible for the recovery from obstructive cholestasis in rats. A similar mechanism might be present in conditions of bile duct obstruction without cholestasis. Hepatobiliary agent-enhanced magnetic resonance imaging is more sensitive than blood tests in detecting local cholestasis and can be used to monitor noninvasively the evolution of biliary obstruction. (Hepatology 1994;20:1557–1566).