Oral treatment with chenodeoxycholic acid causes dissolution of cholesterol gallstones in man. In order to determine the mechanism of this effect, we have measured 24-hour biliary lipid output, lipid composition of fasting gallbladder bile, and bile acid pool sizes before and during such treatment in six patients with radiolucent gallstones in functioning gallbladders. In all six patients, the degree of cholesterol saturation of fasting-state gallbladder bile was decreased during treatment to a level below the thermodynamic solubility line. This effect was due to a decrease in biliary cholesterol output, associated with conversion of more than 90% of the total bile acid pool to chenodeoxycholic acid. It could not be attributed to an increase in total bile acid pool size nor to an increase in biliary bile acid or phospholipid output.