Bile salts have potent detergent properties and damaging effects on cell membranes, leading to liver injury. However, the molecular mechanisms for the protection of hepatocytes against bile salts are not fully understood. In this study, we demonstrated that the cytotoxicity of nine human major bile salts to HepG2 cells and primary human hepatocytes was prevented by phosphatidylcholine ( PC). In contrast, cholesterol had no direct cytotoxic effects but suppressed the cytoprotective effects of PC. PC reduced the cell-association of bile salt, which was reversed by cholesterol. Light scattering measurements and gel filtration chromatography revealed that cholesterol within bile salt/PC dispersions decreased mixed micelles but increased vesicles, bile salt simple micelles and monomers. These results suggest that cholesterol attenuates the cytoprotective effects of PC against bile salts by facilitating the formation of bile salt simple micelles and monomers. Therefore, biliary PC and cholesterol may play different roles in the pathogenesis of bile salt-induced liver injury.