Renal function with respect to water clearance and renal hemodynamics was studied in 15 patients with obstructive jaundice due to cholangiocarcinoma. The results were compared with those of the control normal subjects. There was no change in renal function in the patients with mild to moderate jaundice, with total serum bilirubin from 8.0 to 15.1 mg/dl. Increased urinary sodium excretion and decreased free water and negative water clearances were observed in the patients with severe jaundice with total serum bilirubin from 27.0 to 40.4 mg/dl and normal serum albumin. Renal blood flow was normal, but creatinine clearance was decreased. In severely jaundiced patients with serum bilirubin from 30.5 to 40.1 mg/dl and hypoalbuminemia urinary sodium excretion, free water clearance, negative water clearance, renal blood flow and creatinine clearance were decreased. There was salt and water retention in this group. The findings suggest that in severe jaundice there is inhibition of sodium chloride reabsorption in the thick ascending limb of Henle's loop. ADH and increased hydraulic conductivity of the collecting tubules possibly contribute to decreased free water clearance. In severely jaundiced patients with hypoalbuminemia this salt losing effect is converted to salt retention by increased proximal tubular reabsorption of sodium.