Biliary atresia is a mystifying cause of neonatal cholestasis, manifested by progressive inflammation and fibrosis of both the extrahepatic and intrahepatic bile ducts. It is a devastating disease that leads to cirrhosis and the need for liver transplantation in the majority of children. The etiology is unknown, and one theory is that it may involve a primary perinatal hepatobiliary viral infection and a secondary generation of an autoimmune-mediated bile duct injury. This review will outline the evidence from both human and murine studies supporting a potential cholangiotropic viral infection as the initiator of bile duct injury in biliary atresia and the role of the adaptive immune response and autoimmunity in progression of disease. Delineating the pathways of immune and autoimmune-mediated bile duct injury within biliary atresia could stimulate development of new medical interventions aimed at suppressing the specific immune response, decreasing the inflammatory damage to bile ducts, and delaying or negating the need for liver transplantation.