Studies of hepatic bile formation reported in 1958 established that it was an osmotically generated water flow. Intravenous infusion of sodium taurocholate established a high correlation between hepatic bile flow and bile acid excretion. Secretin, a hormone that stimulates bicarbonate secretion, was also found to increase hepatic bile flow. The sources of the water entering the biliary system with these two stimuli were differentiated by the use of mannitol. An increase in its excretion parallels the increase in bile flow in response to bile acids but not secretin, which led to a quantitative distinction between canalicular and ductular water flow. The finding of aquaglyceroporin-9 in the basolateral surface of the hepatocyte accounted for the rapid entry of mannitol into hepatocytes and its exclusion from water movement in the ductules where aquaporin-1 is present. Electron microscopy demonstrated that bile acids generate the formation of vesicles that contain lecithin and cholesterol after their receptor-mediated canalicular transport. Biophysical studies established that the osmotic effect of bile acids varies with their concentration and also with the proportion of mono-, di-, and trihydroxy bile acids and provides a basis for understanding their physiological effects. Because of the varying osmotic effect of bile acids, it is difficult to quantify bile acid independent flow generated by other solutes, such as glutathione, which enters the biliary system. Monohydroxy bile acids, by markedly increasing aggregation number, severely reduce water flow. Developing biomarkers for the noninvasive assessment of normal hepatic bile flow remains an elusive goal that merits further study.