The efficacy of 2 years of treatment with ursodeoxycholic acid (UDCA) in cystic fibrosis (CF)-associated liver disease was evaluated by liver biopsies and liver function tests in 10 patients aged 8 to 28 years. The metabolism of UDCA was investigated by analysis of urinary bile acids with fast atom bombardment mass spectrometry (FABMS) and gas-liquid chromatography–mass spectrometry. Eight patients responded with normalization of liver function tests (LFT) and all with decreased serum levels of immunoglobulin G (IgG). Blind evaluation of liver biopsies indicated improved liver morphology with less inflammation and/or bile duct proliferation than before treatment with UDCA in 7 patients. Only 1 patient had signs of progression of clinical liver disease. The proportion of UDCA and isoUDCA in urine varied, but increased during treatment from a mean (median) of approximately 4% (3%) to 40% (40%) of total bile acids. The increase was not related to LFT. The secondary bile acids, such as lithocholic acid (LCA) and deoxycholic acid (DCA), did not increase significantly. The excretion pattern of glycosidic conjugates of UDCA and its metabolites was similar to that found in healthy individuals, UDCA and isoUDCA being mainly excreted in conjugation with N-acetylglucosamine. This study shows that UDCA modulates inflammation in CF-associated liver disease and indicates improvement of liver morphology during 2 years of treatment.