Balance studies, which focused on bile acid metabolism, were carried out on 9 patients with ileal resection in order to define the importance of bile acid malabsorption in the pathogenesis of the diarrhea and steatorrhea. The influence of cholestyramine (Q) or type of dietary fat—long chain triglyceride (LCT) or equicalorically substituted medium chain triglyceride (MCT)—on bile acid synthesis, diarrhea, steatorrhea, and fecal electrolyte excretion was measured during steady state intervals of four randomized periods (LCT, LCT + Q, MCT, and MCT + Q). During control (LCT) periods, all patients had bile acid malabsorption, excreting >75% of administered taurocholate^-14C within 24 hr, and this malabsorption was accompanied by a 10- to 20-fold increase in bile acid synthesis. Patients with ileal resection of less than 100 cm had greatly increased concentrations of bile acids in fecal water compared with normal control subjects. Administration of cholestyramine significantly decreased fecal weight, frequency, and sodium ion excretion as well as the concentration of bile acid in fecal water. These observations, together with our previous demonstration that bile acids induce water and electrolyte secretion by the human colon, provide evidence that a major cause of diarrhea in these patients was the increased passage of bile acids into the colon. Cholestyramine caused the already increased bile acid synthesis to increase still more in some of these patients; maximal synthesis was 0.1 to 0.3 mmole per kg of body weight per day, based on gas chromatographic measurements of fecal bile acids. All patients had mild steatorrhea (< 20 g per day), and malabsorption of fat appeared to contribute little to diarrhea because diarrhea persisted during MCT periods when steatorrhea was not present. Cholestyramine did increase steatorrhea when LCT was fed, but this was of no caloric significance. Patients with ileal resection of more than 100 cm had greater steatorrhea (>20 g per day); fat malabsorption appeared to be a major cause of diarrhea, since replacement of LCT by MCT caused a decrease in fecal weight, sodium, and potassium as well as a striking decrease in steatorrhea. Unabsorbed fatty acids were converted in part to hydroxy fatty acids by intestinal bacteria and it is proposed that unabsorbed fatty acid or its bacterial product, hydroxy fatty acid, or both, contributed to diarrhea. Bile acid malabsorption appeared to play no direct role in the diarrhea in 2 of 3 patients, since there ~ was no response to cholestyramine and the concentration of bile acids in fecal water was low. Malabsorption of bile acids was nonetheless important in the syndrome, since jejunal bile acid concentrations were decreased (causing fat maldigestion) in 2 of 3 patients, and fat maldigestion, together with decreased mucosal surface, was the probable explanation for the severe steatorrhea. These studies define two syndromes of bile acid malabsorption, present evidence for different mechanisms of diarrhea in each, and describe a therapeutic program.