Bile acid diarrhea (BAD) is usually seen in patients with ileal Crohn’s disease or ileal resection. However, 25% to 50% of patients with functional diarrhea or diarrhea-predominant irritable bowel syndrome (IBS-D) also have evidence of BAD. It is estimated that 1% of the population may have BAD. The causes of BAD include a deficiency in fibroblast growth factor 19 (FGF-19), a hormone produced in enterocytes that regulates hepatic bile acid (BA) synthesis. Other potential causes include genetic variations that affect the proteins involved in BA enterohepatic circulation and synthesis or in the TGR5 receptor that mediates the actions of BA in colonic secretion and motility. BAs enhance mucosal permeability, induce water and electrolyte secretion, and accelerate colonic transit partly by stimulating propulsive high-amplitude colonic contractions. There is an increased proportion of primary BAs in the stool of patients with IBS-D, and some changes in the fecal microbiome have been described. There are several methods of diagnosing BAD, such as 75 selenium homotaurocholic acid test retention, serum C4, FGF-19, and fecal BA measurement; presently, therapeutic trials with BA sequestrants are most commonly used for diagnosis. Management involves the use of BA sequestrants including cholestyramine, colestipol, and colesevelam. FXR agonists such as obeticholic acid constitute a promising new approach to treating BAD.