Because bile acids bind to certain proteins we examined whether the effect of dihydroxy bile acids on jejunal water transport and gastric mucosal function could be blocked by the presence of protein. In the rat jejunum 2.5% bovine serum albumin blocked the secretion of water and electrolytes induced by 2 mM deoxycholate, whereas 5% ovalbumin, which does not bind bile acids, had no effect. Bovine serum albumin protected large unilamellar liposomes from damage by taurodeoxycholate and reduced the monomer concentration of taurodeoxycholate, whereas ovalbumin afforded no protection. In equilibrium dialysis studies whey protein and bovine serum albumin reduced the free taurodeoxycholate concentration (150 mM HCl enhanced this effect). In the rat stomach taurodeoxycholate (2.5 or 10 mM) in the presence of 150 mM HCl reduced potential difference and enhanced sodium secretion and hydrogen ion loss. These effects were reduced in the presence of whey protein. We conclude that proteins that bind bile acids have the potential to protect mucosal membranes from the adverse effects of bile acids.