Bile acids are synthesized in the liver and are the major component in bile. Impaired bile flow leads to cholestasis that is characterized by elevated levels of bile acid in the liver and serum, followed by hepatocyte and biliary injury. Although the causes of cholestasis have been extensively studied, the molecular mechanisms as to how bile acids initiate liver injury remain controversial. In this chapter, we summarize recent advances in the pathogenesis of bile acid induced liver injury. These include bile acid signaling pathways in hepatocytes as well as the response of cholangiocytes and innate immune cells in the liver in both patients with cholestasis and cholestatic animal models. We focus on how bile acids trigger the production of molecular mediators of neutrophil recruitment and the role of the inflammatory response in this pathological process. These advances point to a number of novel targets where drugs might be judged to be effective therapies for cholestatic liver injury.