Twenty-two infants and children with extrahepatic biliary atresia were treated by Kasai's hepatic portoenterostomy operation since 1972. Postoperative bile drainage occurred in 11 infants. Success never was obtained in patients older than 12 weeks nor in the absence of microscopic biliary ductules in the excised fibrotic remnant of the extrahepatic bile ducts. With these exclusions almost 90 percent of infants with biliary atresia had sustained bile drainage after operation. In the early cases, ascending cholangitis was a major and recurrent complication with sequellae in many instances of permanent jaundice and probably irreversible liver damage. A new and simple modification of Kasai's original operation has prevented this complication thus far. Despite apparently normal bile drainage, postoperative studies by transhepatic cholangiography in some of these patients have demonstrated a grossly abnormal hepatobiliary intrastructure, suggesting that an underlying liver involvement may be present in biliary atresia.