A safe and effective medical therapy for patients with the chronic cholestatic liver diseases primary biliary cirrhosis (PBC) and primary sclerosing cholangitis (PSC) is lacking, and liver transplantation is at present the only curative treatment option. The effect of ursodeoxycholic acid (UDCA) in primary biliary cirrhosis has recently been investigated in several double-blind, placebo-controlled trials. Treatment with ursodeoxycholic acid regularly improves the biochemical markers of liver disease. In some studies ursodeoxycholic acid delays the progression of primary biliary cirrhosis, whereas survival is not significantly affected. UDCA-treatment in primary biliary cirrhosis is now recommended in several countries, for example in the U.S. We suggest that UDCA-treatment in Norway of patients with primary biliary cirrhosis should follow uniform guidelines. Ursodeoxycholic acid may also have a positive effect in primary sclerosing cholangitis. A Scandinavian multi-centre, placebo-controlled study of the effect of five-year long treatment of primary sclerosing cholangitis with ursodeoxycholic acid has recently started. The precise mechanism of the favourable effect of ursodeoxycholic acid in cholestasis is not understood.