Biliary epithelia express high levels of CD44 in hepatobiliary diseases. The role of CD44-hyaluronic acid interaction in biliary pathology, however, is unclear. A rat model of hepatic cholestasis induced by bile duct ligation was employed for characterization of hepatic CD44 expression and extracellular hyaluronan distribution. Cell culture experiments were employed to determine whether hyaluronan can regulate cholangiocyte growth through interacting with adhesion molecule CD44. Biliary epithelial cells were found to express the highest level of CD44 mRNA among four major types of nonparenchymal liver cells, including Kupffer, hepatic stellate, and liver sinusoidal endothelial cells isolated from cholestatic livers. CD44-positive biliary epithelia lining the intrahepatic bile ducts were geographically associated with extracellular hyaluronan accumulated in the portal tracts of the livers, suggesting a role for CD44 and hyaluronan in the development of biliary proliferation. Cellular proliferation assays demonstrated that cholangiocyte propagation was accelerated by hyaluronan treatment and antagonized by small interfering RNA CD44 or anti-CD44 antibody. The study provides compelling evidence to suggest that proliferative biliary epithelia lining the intrahepatic bile ducts are a prime source of hepatic CD44. CD44-hyaluronan interaction, by enhancing biliary proliferation, may play a pathogenic role in the development of cholestatic liver diseases.