A significant amount of biliary cholesterol is carried in unilamellar-phospholipid (lecithin) vesicles, in both supersaturated human hepatic bile and unsaturated rat bile. This fact supports the concept that biliary cholesterol is normally secreted in phospholipid vesicles from the hepatocyte into the canaliculus. The fundamental aspects of biliary lipid secretion relate first to the quantitative determinants of hepatocytic cholesterol secretion into the bile and, second, to the cell biology of this process. There is a tight curvilinear coupling between the rates of bile acids and biliary lipid secretion in all animal species. The hydrophobicity of the bile acid pool may modify this cosecretory mechanism in that more hydrophobic bile acids recruit more phospholipid and cholesterol per mole of bile acid secreted into the bile. The quantitative significance of this effect, however, is relatively minor. In contrast, intrahepatic determinants, such as the rates of hepatic cholesterol esterification and very low density lipoprotein production modulated by dietary factors, may markedly change the amount of cholesterol carried in vesicles into the bile. Recent studies provide strong evidence to support the concept that biliary cholesterol output is also modulated by the amount of free cholesterol available in specific regions of the endoplasmic reticulum for recruitment by the bile acid cosecretory mechanism. The origin of biliary lipids is in the smooth endoplasmic reticulum membranes. The intracellular transport and the canalicular secretory mechanism of the precursor of biliary lipid vesicles is mostly unknown. Two theories related to the cell biology of biliary lipid secretion are discussed in this article, the fusion-budding model and the exocytotic model.