Paracrine signaling between cholangiocytes and stromal cells regulates biliary remodeling. Cholangiocytes have neuroepithelial characteristics and serotonin receptor agonists inhibit their growth, but whether they are capable of serotonin biosynthesis is unknown. We hypothesized that cholangiocytes synthesize serotonin and that cross talk between liver myofibroblasts (MF) and cholangiocytes regulates this process to influence biliary remodeling. Transwell cultures of cholangiocytes ± MF, and tryptophan hydroxylase-2 knockin (TPH2KI) mice with an inactivating mutation of the neuronal tryptophan hydroxylase (TPH) isoform, TPH2, were evaluated. Results in the cell culture models confirm that cholangiocytes have serotonin receptors and demonstrate for the first time that these cells express TPH2 and produce serotonin, which autoinhibits their growth but stimulates MF production of TGF-β(1). Increased TGF-β(1), in turn, counteracts autocrine inhibition of cholangiocyte growth by repressing cholangiocyte TPH2 expression. Studies of TPH2KI mice confirm that TPH2-mediated production of serotonin plays an important role in remodeling damaged bile ducts because mice with decreased TPH2 function have reduced biliary serotonin levels and exhibit excessive cholangiocyte proliferation, accumulation of aberrant ductules and liver progenitors, and increased liver fibrosis after bile duct ligation. This new evidence that cholangiocytes express the so-called neuronal isoform of TPH, synthesize serotonin de novo, and deploy serotonin as an autocrine/paracrine signal to regulate regeneration of the biliary tree complements earlier work that revealed that passive release of serotonin from platelets stimulates hepatocyte proliferation. Given the prevalent use of serotonin-modulating drugs, these findings have potentially important implications for recovery from various types of liver damage.