The beneficial effect of ursodeoxycholic add have been documented in adults but experience with this agent is limited in the pediatric population. The objective of this study was to evaluate ursodeoxycholic acid treatment in children with cholestatic liver disease. Twenty-four patients with intrahepatic cholestasis (neonatal hepatitis 7, Byler disease 7, idiopathic intrahepatic cholestasis 10) whose ages ranged from 1.5 months to 15 years were treated with ursodeoxycholic acid (15-20 mg/kg/day) for 12 months. Liver biopsy was performed initially on all patients and on 17 at the end of the twelve months. The outcome was evaluated by monitoring clinical and biochemical markers of cholestasis, including alanine aminotransferase, aspartate aminotransferase, alkaline phosphatase, gamma-glutamyl transpeptidase, cholesterol, total serum tasting bile acids and total and conjugated bilirubin at entry and every three months of treatment. Pruritus was ameliorated in all patients; there was complete disappearance of itching in 16.7 percent. There were significant decreases in mean serum levels of alanine aminotransferase, aspartate aminotransferase, alkaline phosphatase, total bilirubin and gamma-glutamyl transpeptidase. Liver biopsy specimens showed a significant improvement in the cholestasis but not in fibrosis. No adverse effects of therapy were noted. The improvements in the clinical and biochemical parameters and tolerability of the drug suggest that ursodeoxycholic acid is a safe and effective treatment in children with intrahepatic cholestasis.