BACKGROUND Bile acid malabsorption (BAM) is a common but frequently under-recognized cause of chronic diarrhea, with an estimated prevalence of 4% to 5%. METHODS The published literature for the period 1965 to 2012 was examined for articles regarding the pathophysiology and treatment of BAM to provide an overview of the management of BAM in gastroenterology practice. RESULTS BAM is classified as type 1 (secondary to ileal dysfunction), type 2 (idiopathic) or type 3 (secondary to gastrointestinal disorders not associated with ileal dysfunction). The estimated prevalence of BAM is >90% in patients with resected Crohn disease (CD) and 11% to 52% of unresected CD patients (type 1); 33% in diarrhea-predominant irritable bowel syndrome (type 2); and is a frequent finding postcholecystectomy or postvagotomy (type 3). Investigations include BAM fecal bile acid assay, 23-seleno-25-homo-tauro-cholic acid (SeHCAT) testing and high-performance liquid chromatography of serum 7-α-OH-4-cholesten-3-one (C4), to determine the level of bile acid synthesis. A less time-consuming and expensive alternative in practice is an empirical trial of the bile acid sequestering agent cholestyramine. An estimated 70% to 96% of chronic diarrhea patients with BAM respond to short-course cholestyramine. Adverse effects include constipation, nausea, borborygmi, flatulence, bloating and abdominal pain. Other bile acid sequestering agents, such as colestipol and colesevelam, are currently being investigated for the treatment of BAM-associated diarrhea. CONCLUSIONS BAM is a common cause of chronic diarrhea presenting in gastroenterology practice. In accordance with current guidelines, an empirical trial of a bile acid sequestering agent is warranted as part of the clinical workup to rule out BAM.