Metabolic stress causes activation of the cJun NH2-terminal kinase (JNK) signal transduction pathway. It is established that one consequence of JNK activation is the development of insulin resistance and hepatic steatosis through inhibition of the transcription factor PPARalpha. Indeed, JNK1/2 deficiency in hepatocytes protects against the development of steatosis, suggesting that JNK inhibition represents a possible treatment for this disease. However, the long-term consequences of JNK inhibition have not been evaluated. Here we demonstrate that hepatic JNK controls bile acid production. We found that hepatic JNK deficiency alters cholesterol metabolism and bile acid synthesis, conjugation, and transport, resulting in cholestasis, increased cholangiocyte proliferation, and intrahepatic cholangiocarcinoma. Gene ablation studies confirmed that PPARalpha mediated these effects of JNK in hepatocytes. This analysis highlights potential consequences of long-term use of JNK inhibitors for the treatment of metabolic syndrome.