Cholic acid is a critical component of the lithogenic diet in mice. To determine its pathogenetic roles, we fed chow or 1% cholesterol with or without 0.5% cholic acid to C57L/J male mice, which because of lith genes have 100% gallstone prevalence rates. After 1 yr on the diets, we measured bile flow, biliary lipid secretion rates, hepatic cholesterol and bile salt synthesis, and intestinal cholesterol absorption. After hepatic conjugation with taurine, cholate replaced most tauro-β-muricholate in bile. Dietary cholic acid plus cholesterol increased bile flow and biliary lipid secretion rates and reduced cholesterol 7α-hydroxylase activity significantly mostly via deoxycholic acid, cholate’s bacterial 7α-dehydroxylation product but did not downregulate cholesterol biosynthesis. Intestinal cholesterol absorption doubled, and biliary cholesterol crystallized as phase boundaries shifted. Feeding mice 1% cholesterol alone produced no lithogenic or homeostatic effects. We conclude that in mice cholic acid promotes biliary cholesterol hypersecretion and cholelithogenesis by enhancing intestinal absorption, hepatic bioavailability, and phase separation of cholesterol in bile.