1. After experimental ligation of the bile ducts in dogs, two distinct processes are clearly manifested: first, the accumulation of the normally circulating bilirubin in the blood with its characteristic indirect Van den Bergh reaction for a period of several hours, and second, the subsequent appearance of the bile bilirubin giving the direct Van den Bergh reaction. It is possible that the first process may be due to a temporary reflex inhibition of the function of the liver cells due to ligation of the duct and comparable to the same phenomenon which usually occurs in the kidney when the ureter is ligated. The second process begins before any rupture of the bile capillaries is visible. Liver sections made 6 to 7 hours after obstruction show these bile capillaries dilated and extending between the liver cells in small distended pouches the blind end of these lying in contact with the pericapillary spaces. It is possible that bile may diffuse from these thin walled pouches into the perivascular lymph spaces, this diffusion being favored by the mounting pressure inside the bile ducts. 2. In early obstructive jaundice bile first appears in the lymph, but exclusion of the thoracic duct from the circulation by drainage causes a delay of only a few hours in the appearance of bile bilirubin in the blood stream. We must therefore conclude that after biliary obstruction bile enters the circulation both by way of the blood capillarieś and the lymphatics, although the latter route is the more important.