A approximately 110-kDa glycoprotein purified from canalicular vesicles by bile acid affinity chromatography has been identified as the canalicular bile acid transport protein. Internal amino acid sequence and chemical and immunochemical characteristics of this protein were found to be identical to a rat liver canalicular ecto-ATPase. In order to definitively determine whether these were two activities of a single polypeptide, we examined the possibility that transfection of cDNA for the ecto-ATPase would confer bile acid transport characteristics, as well as ecto-ATPase activity, on heterologous cells. The results show that transfection of the ecto-ATPase cDNA conferred on COS cells de novo synthesis of a approximately 110-kDa polypeptide, as immunoprecipitated by antibody to the purified canalicular bile acid transport protein and conferred on COS cells the capacity to pump out [3H]taurocholate with efflux characteristics comparable with those previously determined in canalicular membrane vesicles (Km = 100 microM; Vmax = 200 pmol/mg of protein/20 s). A truncated ecto-ATPase cDNA, missing the cytoplasmic tail, was targeted correctly to the cell surface but did not confer bile acid transport activity on COS cells. The results of this study also show that the canalicular ecto-ATPase/bile acid transport protein is phosphorylated on its cytoplasmic tail and that its phosphorylation is stimulated by activation of protein kinase C and inhibited by inhibitors of protein kinase C activation. Moreover, inhibition of protein kinase C activation by staurosporine completely abrogates bile acid transport but does not affect ATPase activity. This study, therefore, demonstrates that the rat liver canalicular ecto-ATPase is also a bile acid transport protein, that the capacity to pump out bile acid can be conferred on a heterologous cell by DNA-mediated gene transfer, and that phosphorylation within the cytoplasmic tail of the transporter is essential for bile acid efflux activity but not for ATPase activity.