Biliary atresia, a progressive obliterative process involving the bile ducts, has its onset in the newborn period. It is characterized by worsening cholestasis, hepatic fibrosis, and cirrhosis, which lead to portal hypertension and a decline in hepatic synthetic function. Untreated, the outcome is uniformly fatal. The two major milestones toward improved treatment of this disease have been the Kasai portoenterostomy and orthotopic liver transplantation. There has been discussion regarding transplantation as primary therapy, but portoenterostomy remains the standard of care as first-line intervention. Hepatic transplantation, done more frequently for biliary atresia than for any other cause of liver failure in the pediatric population, offers improved survival and quality of life to those for whom the Kasai operation fails. The etiology of biliary atresia remains poorly understood. Working toward a better understanding of this disease, recent investigations target more precise characterization of the hepatic pathology and seek to identify possible causative agents and predictors of favorable outcome. Recent advances in the understanding of biliary atresia published between December 1995 and November 1996 are the focus of this review.