Identifying and treating kidney injury in cirrhosis is important. Bile duct ligation (BDL) is a commonly used cholestatic liver disease model. We hypothesized that asymmetric dimethylarginine (ADMA) is involved in BDL-induced oxidative stress and kidney injury, which can be prevented by melatonin. We also intended to elucidate whether increased ADMA is due to increased protein arginine methyltransferase-1 (PRMT1, ADMA-synthesizing enzyme) and/or decreased dimethylarginine dimethylaminohydrolase (DDAH, ADMA-metabolizing enzyme). Three groups of young rats were studied, sham (N = 7), untreated BDL rats (N = 9), and melatonin-treated BDL rats (N = 6, BDL + M). Melatonin-treated BDL rats received daily melatonin 1 mg/kg/day via intraperitoneal injection. One-third of the young BDL rats died compared with none in the BDL + M group. All surviving rats were killed 14 days after surgery. BDL rats had higher plasma aspartate aminotransferase, alanine aminotransferase, direct and total bilirubin, and ammonia levels than shams. They also had kidney injury characterized by increased tubulointerstitial injury scores and plasma creatinine and symmetric dimethylarginine levels, which melatonin prevented. Plasma ADMA levels were elevated in BDL rats, combined with increased hepatic PRMT1 and decreased renal DDAH activity. In addition, melatonin increased hepatic DDAH2 expression, increased DDAH activity and concomitantly decreased ADMA contents in both the liver and kidney. In conclusion, melatonin therapy decreased mortality and prevented kidney injury induced by BDL via reduction of ADMA (by increasing DDAH activity) and oxidative stress.