Jejunal self-filling blind loops with subsequent small bowel bacterial overgrowth (SBBO) induce hepatobiliary injury in genetically susceptible Lewis rats. Lesions consist of portal tract inflammation, bile duct proliferation, and destruction. To determine the pathogenesis of SBBO-induced hepatobiliary injury, we treated Lewis rats with SBBO by using several agents with different mechanisms of activity. Buffer treatment, ursodeoxycholic acid, prednisone, methotrexate, and cyclosporin A failed to prevent SBBO-induced injury as demonstrated by increased plasma aspartate aminotransferase (AST) and elevated histology scores. However, hepatic injury was prevented by mutanolysin, a muralytic enzyme whose only known activity is to split the beta 1-4 N-acetylmuramyl-N-acetylglucosamine linkage of peptidoglycan-polysaccharide (PG-PS), a bacterial cell wall polymer with potent inflammatory and immunoregulatory properties. Mutanolysin therapy started on the day blind loops were surgically created and continued for 8 wk significantly diminished AST (101 +/- 37 U/liter) and liver histology scores (2.2 +/- 2.7) compared to buffer-treated rats (228 +/- 146 U/liter, P < 0.05, 8.2 +/- 1.9, P < 0.001 respectively). Mutanolysin treatment started during the early phase of hepatic injury, 16-21 d after surgery, decreased AST in 7 of 11 rats from 142 +/- 80 to 103 +/- 24 U/liter contrasted to increased AST in 9 of 11 buffer-treated rats from 108 +/- 52 to 247 +/- 142 U/liter, P < 0.05. Mutanolysin did not change total bacterial numbers within the loop, eliminate Bacteroides sp., have in vitro antibiotic effects, or diminish mucosal PG-PS transport. However, mutanolysin treatment prevented elevation of plasma anti-PG antibodies and tumor necrosis factor-alpha (TNF alpha) levels which occurred in buffer treated rats with SBBO and decreased TNF alpha production in isolated Kupffer cells stimulated in vitro with PG-PS. Based on the preventive and therapeutic activity of this highly specific muralytic enzyme, we conclude that systemic uptake of PG-PS derived from endogenous enteric bacteria contributes to hepatobiliary injury induced by SBBO in susceptible rat strains.