Ursodeoxycholic acid (UCDA) is increasingly used for the treatment of cholestatic liver diseases. Experimental evidence suggests three major mechanisms of action: (1) protection of cholangiocytes against cytotoxicity of hydrophobic bile acids, resulting from modulation of the composition of mixed phospholipid-rich micelles, reduction of bile acid cytotoxicity of bile and, possibly, decrease of the concentration of hydrophobic bile acids in the cholangiocytes; (2) stimulation of hepatobiliary secretion, putatively via Ca(2+)- and protein kinase C-alpha-dependent mechanisms and/or activation of p38(MAPK) and extracellular signal-regulated kinases (Erk) resulting in insertion of transporter molecules (e.g., bile salt export pump, BSEP, and conjugate export pump, MRP2) into the canalicular membrane of the hepatocyte and, possibly, activation of inserted carriers; (3) protection of hepatocytes against bile acid-induced apoptosis, involving inhibition of mitochondrial membrane permeability transition (MMPT), and possibly, stimulation of a survival pathway. In primary biliary cirrhosis, UDCA (13-15 mg/kg/d) improves serum liver chemistries, may delay disease progression to severe fibrosis or cirrhosis, and may prolong transplant-free survival. In primary sclerosing cholangitis, UDCA (13-20 mg/kg/d) improves serum liver chemistries and surrogate markers of prognosis, but effects on disease progression must be further evaluated. Anticholestatic effects of UDCA have also been reported in intrahepatic cholestasis of pregnancy, liver disease of cystic fibrosis, progressive familial intrahepatic cholestasis, and chronic graft-versus-host disease. Future efforts will focus on definition of additional clinical uses of UDCA, on optimized dosage regimens, as well as on further elucidation of mechanisms of action of UDCA at the molecular level.