Feeding oleic acid to rabbits resulted in a progressive rise in bile concentration of allodeoxycholic acid, expansion of the bile salt pool, and depression of de novo hepatic bile acid synthesis. There was also an increase in cholesterol saturation in bile. The gallstones that formed contained traces of cholesterol but were composed mainly of salts of allodeoxycholic acid. The data suggest that oleic acid feeding results in increased rate of cholestanol and allodeoxycholic acid metabolism. Morphologically, these biochemical events were accompanied by early reactive changes in the gallbladder epithelium characterized by marked increase in cell proliferation and mucus hypersecretion. In addition, there was the early formation of interepithelial cell vacuoles and, later, Rokitansky-Aschoff sinuses. These cellular reactions reflect the dramatic and important changes that take place in the gallbladder before gallstone formation.