3 alpha-Hydroxysteroid dehydrogenase catalyzes the reduction of 3-oxo-bile acids and binds 3 alpha-hydroxy bile acids. Indomethacin is a competitive inhibitor of the enzyme. In incubations of isolated rat hepatocytes, indomethacin delayed the intracellular reduction and the initial uptake of 3-oxocholic acid. Following a tracer dose of 3-oxocholic acid in perfused rat liver, rapid biliary excretion was observed mainly as taurocholic acid. Only 1.1% of the dose was recovered in the caval outflow and nearly all appeared in the first 5 min collection. When the tracer dose was given after initiating a constant infusion of indomethacin (50 microM), a dramatic decrease in biliary excretion was observed, still mainly as taurocholic acid, and 14% of the dose was recovered in the caval effluent: 10% in the first 5 min collection, mainly as 3-oxocholic acid, followed by a steady, slow release of mainly taurocholic acid. The increased intrahepatic retention of bile acids and slow release into perfusate and bile in response to indomethacin are consistent with displacement of bile acids from cytosolic protein.