Long-term parenteral nutrition of infants who have had major gut resections is associated with a high incidence of cholestatic liver disease. Affected infants have high plasma concentrations of phytosterols--compounds that resemble cholesterol but have an alkylated side chain. The phytosterols that accumulate in patients receiving parenteral nutrition are derived from the soya oil and/or soya lecithin used to make the intravenous lipid emulsion. There is a striking association between phytosterolemia and cholestatic liver disease. This has led us to put forward the hypothesis that phytosterols can cause cholestasis in susceptible infants. Experiments using neonatal piglets indicate that phytosterols (given without any of the other components of parenteral nutrition) can indeed reduce bile flow. We suggest that increasing the content of phytosterols in cell membranes may interfere with the function of important transport proteins involved in the secretion of bile. Other factors that might contribute to cholestasis (such as inhibition of cholesterol 7 alpha-hydroxylase) are discussed.