Morphologic changes of the intrahepatic bile ducts after induction of bile stasis and bacterial infection of the biliary tract in two lobes of the liver in mongrel dogs were studied to examine the pathophysiology of hepatolithiasis. Three groups of dogs were prepared by cannulation of the bile duct branch draining the left lateral lobes of the liver and were treated as follows: in group 1 the cannula was clamped after injection of 10(7) Escherichia coli (aerobic bacteria) and 10(7) Bacteroides fragilis (anaerobic bacteria) organisms; in group 2 the cannula was clamped after injection of E. coli only; and in group 3 the cannula was clamped without injection of bacteria. Three months later the livers of killed dogs were examined. In group 1 epithelial adenomatous hyperplasia was noted in association with chronic cholangitis characterized by moderate to severe periductal fibrosis with a large number of inflammatory cells. In group 2 periductal fibrosis was severe, but epithelial hyperplasia was found to a much lesser degree than in group 1. In group 3 no periductal fibrosis or epithelial adenomatous hyperplasia was demonstrated. These findings suggest that adenomatous hyperplasia of the bile duct epithelium may be caused by bacterial infection of the biliary tract in combination with bile stasis.