Glucose is absorbed from bile by cholangiocytes, however, the physiological relevance of absorption of biliary glucose remains unclear. Our aim was to test the hypothesis that glucose absorbed by cholangiocytes drives water uptake by intrahepatic bile ducts via water-channel proteins (AQPs) and is thus involved in ductal bile formation. Isolated rat intrahepatic bile duct units (IBDUs) were perfused in vitro with d-glucose and d-glucose absorption, net water movement, (J_v) and osmotic water permeability, (P_f) measured. In a separate set of in vivo studies in rats, bile flow, bile osmolality and absorption of biliary glucose were measured after intraportal infusion of d-glucose or phlorizin. IBDUs absorbed d-glucose with an absorption maximum of 92.8±6.2 pmol/min/mm. Phlorizin inhibited d-glucose absorption by 85.6% indicating that biliary epithelia absorb d-glucose mainly via SGLT1. IBDUs microperfused with solutions containing 5-15 mM d-glucose absorbed water rapidly (P_f = 40 x 10^-3 cm/sec, J_v = 3-10 nl/min/mm) demonstrating that glucose absorption by IBDUs is associated with a proportionate increase in water absorption. HgCl₂ inhibited water absorption by 68.9% suggesting that water passively follows absorbed d-glucose mainly transcellularly via mercurial-sensitive AQPs. In vivo studies showed that as the amount of absorbed biliary glucose increased after intraportal infusion of d-glucose, bile flow decreased. In contrast, as the absorption of biliary glucose decreased after phlorizin, bile flow increased. Results of in vitro microperfusion and in vivo studies taken together support the hypothesis that the physiological significance of the absorption of biliary glucose by cholangiocytes is likely related to regulation of ductal bile formation.