The metabolism of 14C-labeled bile salts was studied in vitro during their absorption from infused segments of rat intestine. The transported bile salts were recovered in transudates which were collected from the serosal surface of infused segments. In the jejunum, 36% of transported [14C]deoxycholate and 48% of transported [14C]chenodeoxycholate were recovered as metabolites which migrated as a seemingly single polar compound on thin layer chromatography; 52 to 72% of these metabolites could be deconjugated by cholylglycine hydrolase to yield original [14C]deoxycholate or [14C]chenodeoxycholate, respectively. The jejunum metabolized 9 times more [14C]chenodeoxycholate than the ileum (38.1 nmoles per hr per g compared with 4.2 nmoles per hr per g), despite the fact that both segments transferred the same amount of radioactivity. In contrast, [14C]cholate, [14C]glycocholate, and [14C]glycodeoxycholate were transferred intact by the jejunum, ileum, and colon. Human jejunal and rectal mucosa were able to metabolize [14C]chenodeoxycholate to polar metabolites in vitro. Polar metabolites were also found in the portal plasma and jejunal wall 20 min after the feeding of [14C]chenodeoxycholate to bile fistula rats. It is suggested that these results complicate the interpretation of in vitro experiments on absorption of dihydroxy bile salts, and that they indicate that the human small intestine may be able to metabolize chenodeoxycholate.