A 72-year old man developed jaundice while on fusidic acid therapy for suspected osteomyelitis. Hyperbilirubinemia was predominantly of the conjugated variety and elevation in liver enzymes was mild and transient. Although serum bilirubin fell rapidly after fusidic acid was stopped, complete resolution of the hyperbilirubinemia took nearly a month. Other possible causes of jaundice were excluded. Light microscopy of a needle liver biopsy showed focal hepatocyte feathery degeneration, intracellular bile retention, and canalicular bile plugging, most prominent in perivenous regions. Electron microscopy revealed varying degrees of canalicular dilatation, loss of microvilli, and disruption of the canalicular membrane with vesicular bleb formation as well as canalicular bile plugs. Widening of the pericanalicular ectoplasmic zone with accumulation of cytoskeletal filaments was also noted. These findings are similar to those reported in experimental cholestasis induced by bile acids. Possible mechanisms of jaundice caused by fusidic acid are discussed.