Ursodeoxycholic acid (UDCA) exerts anticholestatic effects by undefined mechanisms. Previous work suggested that UDCA stimulates biliary exocytosis via Ca++- and protein kinase C (PKC)-dependent mechanisms. Therefore, the effect of taurine-conjugated UDCA (TUDCA) was studied in the experimental model of taurolithocholic acid (TLCA)-induced cholestasis on bile flow, hepatobiliary exocytosis, distribution of PKC isoforms, and density of the apical conjugate export pump, Mrp2, in canalicular membranes. Isolated perfused rat livers were preloaded with horseradish peroxidase (HRP), a marker of vesicular exocytosis, and were perfused with bile acids or dimethylsulfoxide (control) only. PKC isoform distribution and membrane density of Mrp2 were studied using immunoblotting and immunoelectron-microscopic techniques. Biliary secretion of the Mrp2 substrate, 2,4-dinitrophenyl-S-glutathione (GS-DNP), was studied in the presence or absence of the PKC inhibitor, bisindolylmaleimide I (BIM-I; 1 μmol/L). TLCA (10 μmol/L) impaired bile flow by 51%; biliary secretion of HRP and GS-DNP by 46% and 95%, respectively; membrane binding of the Ca++-sensitive α-isoform of PKC by 32%; and density of Mrp2 in the canalicular membrane by 79%. TUDCA (25 μmol/L) reversed the effects of TLCA on bile flow, secretion of HRP and GS-DNP, and distribution of α-PKC. TUDCA reduced membrane binding of ϵ-PKC and increased Mrp2 density 4-fold in canalicular membranes of cholestatic hepatocytes. BIM-I inhibited the effect of TUDCA on GS-DNP secretion in cholestatic livers by 49% without affecting secretion in controls. In conclusion, TUDCA may enhance the secretory capacity of cholestatic hepatocytes by stimulation of exocytosis and insertion of transport proteins into apical membranes via PKC-dependent mechanisms. (HEPATOLOGY 2001;33:1206-1216.)