The liver secretes cholesterol and lecithin in the form of mixed vesicles during the formation of bile. When exposed to bile salts, these metastable vesicles undergo various structural rearrangements. We have examined the effects of three different bile salts, taurocholate (TC), tauroursodeoxycholate (TUDC), and taurodeoxycholate (TDC), on the stability of sonicated lecithin vesicles containing various amounts of cholesterol. Vesicle growth was probed by turbidity measurements, quasi-elastic light scattering, and a resonance energy transfer lipid-mixing assay. Leakage of internal contents was monitored by encapsulation of fluorescence probes in vesicles. At low bile salt-to-lecithin ratios (TC/L or TUDC/L < 1), pure lecithin vesicles do not grow, but exhibit slow intervesicular mixing of lipids as well as gradual leakage. At high BS/L (TC/L or TUDC/L > 5), pure lecithin vesicles are solubilized into mixed micelles with a concomitant decrease in the overall particle size. In this regime, extensive leakage and lipid mixing occur instantaneously after exposure to bile salt. At intermediate BS/L (1 < TC/L or TUDC/L < 5), vesicles grow with time, and the rates of both leakage and lipid mixing are rapid. The data suggest that vesicles grow by the transfer of lecithin and cholesterol via diffusion in the aqueous medium. The addition of cholesterol to lecithin vesicles reduces leakage dramatically and increases the amount of BS required for complete solubilization of vesicles. The more hydrophobic TDC induces vesicle growth at a lower BS/L than does TC or TUDC. These results demonstrate the physiologic forms of lipid microstructures during bile formation and explain how the hydrophilic-hydrophobic balance of BS mixtures may profoundly affect the early stages of CH gallstone formation.