The formation of bile depends on the structural and functional integrity of the bile-secretory apparatus and its impairment, in different situations, results in the syndrome of cholestasis. The structural bases that permit bile secretion as well as various aspects related with its composition and flow rate in physiological conditions will first be reviewed. Canalicular bile is produced by polarized hepatocytes that hold transporters in their basolateral (sinusoidal) and apical (canalicular) plasma membrane. This review summarizes recent data on the molecular determinants of this primary bile formation. The major function of the biliary tree is modification of canalicular bile by secretory and reabsorptive processes in bile-duct epithelial cells (cholangiocytes) as bile passes through bile ducts. The mechanisms of fluid and solute transport in cholangiocytes will also be discussed. In contrast to hepatocytes where secretion is constant and poorly controlled, cholangiocyte secretion is regulated by hormones and nerves. A short section dedicated to these regulatory mechanisms of bile secretion has been included. The aim of this revision was to set the bases for other reviews in this series that will be devoted to specific issues related with biliary physiology and pathology.