Formaldehyde may induce severe lesions of intrahepatic and extrahepatic bile ducts. The purpose of this study was to examine in vivo the functional consequences of an alteration of the biliary epithelium induced by a retrograde intrabiliary injection of formaldehyde in rats. After basal bile collection, a 10% formaldehyde solution was injected into the biliary tree of anesthetized rats, and the cannula was occluded for 30 minutes. Choleresis was then reestablished, and bile flow, bile acid, and bicarbonate secretion were measured both spontaneously and during ursodeoxycholate infusions. Formaldehyde injections induced a significant increase in bile flow and a marked inhibition of ursodeoxycholate-induced increase in biliary bicarbonate concentration and secretion. Biliary glucose secretion, which is normally very low, was increased about 20-fold in animals injected with formaldehyde. Histological and ultrastructural examination of the liver showed alterations of biliary epithelial cells, whereas hepatocytes, bile canaliculi, and canalicular tight junctions remained normal. Hepatocytic excretory function, as assessed by biliary secretion of bile acids, was not affected. It was concluded that short-term formaldehyde intrabiliary injections cause an inhibition of ursodeoxycholate-induced hypersecretion of bicarbonate, an increase in biliary glucose secretion, and selective structural alterations of biliary epithelial cells. These results suggest that formaldehyde retrograde biliary injection may be a useful model to study alterations of biliary epithelial function in vivo.