BACKGROUND We hypothesized that ileal stem cell clusters transplanted into a segment of jejunum can be used to treat bile acid malabsorption. METHODS In adult Lewis rats, a 15-cm segment of jejunum was isolated with its blood circulation left intact and partially stripped of enterocytes using luminal high-velocity perfusions with 3mmol/L ethylenediamine tetra-acetic acid solutions. Continuity was restored by anastomosing the proximal and distal gut. Ileal stem cell clusters were harvested from neonatal Lewis rats and transplanted into the stripped segments to generate a "neoileum." After 4weeks, recipients underwent resection of the native ileum, and the isolated neoileum was anastomosed in its place. After an additional 4weeks, a 48-hour stool collection was performed. The engrafted segment was harvested for taurocholate uptake studies, ileal bile acid transporter (IBAT) protein by immunohistomorphometry, and IBAT mRNA quantitation by reverse transcription polymerease chain reaction. Data were analyzed by ANOVA/t-test. Rats undergoing ileectomy, jejunectomy, or sham operations served as controls. RESULTS Total bile acid loss in the stool was markedly lower in rats with a neoileum compared with rats with an ileectomy (p < 0.001). Total taurocholate uptake was notably increased in the neoileum compared with the jejunum (p < 0.001). IBAT protein signal intensity was considerably higher in the neoileum compared with jejunum (p < 0.001). IBAT mRNA amounts in the neoileal group were comparable with those in normal rat ileum and were considerably higher (p = 0.003) than in the jejunum. CONCLUSIONS Ileal stem cell clusters were used to establish a new zone of bile acid uptake and IBAT expression in a jejunal segment. This neoileum eliminated loss of bile acids in the stool after ileectomy. This is the first time that transplantation of intestinal stem cell clusters has been shown to correct a clinical malabsorption syndrome.