The effects of chenodeoxycholic (CDC), 750 mg. per day, phenobarbital (PB), 90 or 180 mg., combined (CDC + PB), and placebo on biliary lipid composition and on the rate-limiting enzymes of hepatic cholesterol synthesis (HMG-CoA reductase) and bile acid synthesis (cholesterol 7alpha-hydroxylase) were studied. Percutaneous liver biopsies were performed after 6 months of therapy in 4 patients from each group participating in a double-blind study of gallstone dissolution. The enzyme activities were also assayed in liver obtained at laparotomy in 7 untreated gallstone patients and 4 without gallstones. 7alpha,12alpha-Dihydroxycholest-4-en-3-one-12alpha-hydroxylase, an enzyme leading to cholic acid synthesis, was determined in 4 untreated gallstone patients and 4 without gallstones. Untreated gallstone patients had 35 per cent greater HMG-CoA reductase (p less than 0.01), 37 per cent less 7alpha-hydroxylase (p less than 0.01), and 40 per cent less 12alpha-hydroxylase (p less than 0.01) than patients without gallstones. CDC, PB, and both increased biliary CDC and decreased the lithogenic index significantly (p less than 0.01) but saturated bile persisted with PB. CDC decreased HMG-CoA reductase 40 per cent (p less than 0.01) and 7alpha-hydroxylase 47 per cent (p less than 0.01). PB increased HMG-CoA reductase 112 per cent (p less than 0.01) and 7alpha-hydroxylase 20 per cent (p less than 0.01). The combination of CDC and PB increased HMGCoA reductase 40 per cent (p less than 0.01) and had no effect on 7alpha-hydroxylase. In conclusion, CDC induced desaturation of bile while decreasing HMG-CoA reductase and increasing CDC in bile. PB reduced the saturation less effectively than CDC; it increased 7alpha-hydroxylase but also increased HMG-CoA reductase.