Abstract Bile acid malabsorption (BAM) is reported in up to 50% of patients with functional diarrhoea and irritable bowel syndrome with diarrhoea (IBS-D). Serum 7α-hydroxy-4-cholesten-3-one (7αHCO or 7αC4), an indirect measurement of hepatic bile acid synthesis, has been validated as a measurement of BAM relative to the 75SeHCAT retention test. Our aim was to develop a serum 7αC4 assay, normal values, and compare results from healthy controls, patients with ileal Crohn’s disease or resection, and patients with IBS-D or IBS with constipation (IBS-C). Stored serum samples were used from adult men and women in the following groups: 111 normal healthy controls, 15 IBS-D, 15 IBS-C, 24 with distal ileal Crohn’s disease and 20 with distal ileal resection for Crohn’s disease. We adapted a published high pressure liquid chromatography, tandem mass spectrometry (HPLC-MS/MS) assay. The HPLC-MS/MS assay showed good linearity in concentration range 0–200 ng mL−1, sensitivity (lowest limit of detection 0.04 ng mL−1), and high analytical recovery (average 99%, range 93–107%). The 5th to 95th percentile for 111 normal healthy controls was 6–60.7 ng mL−1. There were significant overall group differences (anovaon ranks, P < 0.001), with significantly higher values for terminal ileal disease or resection. There were significant differences between health and IBS (anova, P = 0.043) with higher mean values in IBS-D relative to controls (rank sum test, P = 0.027). We have established a sensitive non-isotopic assay based on HPLC-MS/MS, determined normal 7αC4 values, and identified increased 7αC4 in IBS-D and in distal ileal resection and disease. This assay has potential as a non-invasive test for BAM in IBS.