Bile acids are steroid acids found predominantly in the bile of mammals and other vertebrates. Diverse bile acids are synthesized in the liver in peroxisomes. Bile acids are conjugated with taurine or glycine residues to give anions called bile salts.

Primary bile acids are those synthesized by the liver. Secondary bile acids result from bacterial actions in the colon. In humans, taurocholic acid and glycocholic acid (derivatives of cholic acid) and taurochenodeoxycholic acid and glycochenodeoxycholic acid (derivatives of chenodeoxycholic acid) are the major bile salts. The salts of their 7-alpha-dehydroxylated derivatives, deoxycholic acid and lithocholic acid, are also found, with derivatives of cholic, chenodeoxycholic and deoxycholic acids accounting for over 90% of human biliary bile acids.

Bile acids comprise about 80% of the organic compounds in bile (others are phospholipids and cholesterol). An increased secretion of bile acids produces an increase in bile flow. Bile acids facilitate digestion of dietary fats and oils. They serve as micelle-forming surfactants, which encapsulate nutrients, facilitating their absorption. These micelles are suspended in the chyme before further processing. Bile acids also have hormonal actions throughout the body, particularly through the farnesoid X receptor and GPBAR1 (also known as TGR5).

Bile acid synthesis is the only manner in which humans or other mammals may excrete excess cholesterol, as the parent compound of all bile acids is cholesterol.

Bile acid synthesis occurs in liver cells, which synthesize primary bile acids (cholic acid and chenodeoxycholic acid in humans) via cytochrome P450-mediated oxidation of cholesterol in a multi-step process. Approximately 600 mg of bile salts are synthesized daily to replace bile acids lost in the feces, although, as described below, much larger amounts are secreted, reabsorbed in the gut and recycled.

The rate-limiting step in synthesis is the addition of a hydroxyl group of the 7th position of the steroid nucleus by the enzyme cholesterol 7 alpha-hydroxylase. This enzyme is down-regulated by cholic acid, up-regulated by cholesterol and is inhibited by the actions of the ileal hormone FGF15/19.

Prior to secreting any of the bile acids (primary or secondary, see below), liver cells conjugate them with either glycine or taurine, to form a total of 8 possible conjugated primary bile acids. These conjugated bile acids are often referred to as bile salts. The pKa of the unconjugated bile acids are between 5 and 6.5, and the pH of the duodenum ranges between 3 and 5, so when unconjugated bile acids are in the duodenum, they are almost always protonated (HA form), which makes them relatively insoluble in water. Conjugating bile acids with amino acids lowers the pKa of the bile-acid/amino-acid conjugate to between 1 and 4. Thus conjugated bile acids are almost always in their deprotonated (A-) form in the duodenum, which makes them much more water-soluble and much more able to fulfil their physiological function of emulsifying fats.

Once secreted into the lumen of the intestine, bile salts are modified by gut bacteria. They are partially dehydroxylated. Their glycine and taurine groups are removed to give the secondary bile acids, deoxycholic acid and lithocholic acid. Cholic acid is converted into deoxycholic acid and chenodeoxycholic acid into lithocholic acid. All four of these bile acids are recycled, in a process known as enterohepatic circulation.