Altered hepatic secretory function after orthotopic liver transplantation constitutes a major perioperative clinical problem. Cholestasis and cholesterol gallstone formation are among the most frequent complications reported. Such changes in the allograft secretory function can be secondary to many factors like graft injury due to preservation and marked rejection, surgical complications, immunosuppressive therapy, and sepsis. The effects of liver transplantation per se on bile formation and biliary lipid secretion are unknown. The rat model of orthotopic liver transplantation was used to characterize better the true effect of transplantation without the influence of these confounding variables. Twenty-four-hour bile collections were performed on nine transplanted versus nine liver-denervated (sham) rats 4 weeks after surgery, and nine normal Sprague-Dawley rats. The liver allografts showed mild lymphocytic infiltration in portal tracts and the serum alanine transaminase levels were not significantly elevated. Bile flow and the secretion of bile salts and bilirubin under basal conditions were unchanged. Bile salt pool size, synthesis rate, and bile acid composition did not differ among the three groups. However, cholesterol secretion was dramatically reduced (50%) in the transplanted rats and decreased 31% in the liver-denervated rats (P < .001 and .01, respectively), resulting in a more favorable cholesterol saturation index (CSI = 0.29 for transplanted and 0.32 for sham versus 0.45 for normal controls; P < .01). Thus, liver transplantation with its attendant denervation did not impair hepatic secretory function, but rather improved biliary lipid composition despite mild rejection.