Progressive familial intrahepatic cholestasis type 1 (PFIC1, Byler disease, OMIM 211600) is a severe inherited liver disease caused by mutations in ATP8B1. ATP8B1 is a member of the type 4 subfamily of P-type ATPases, which are phospholipid flippases. PFIC1 patients generally develop end-stage liver disease before the second decade of life. The disease is characterized by impaired biliary bile salt excretion, but the mechanism whereby impaired ATP8B1 function results in cholestasis is unclear. In a mouse model for PFIC1, we observed decreased resistance of the hepatocanalicular membrane to hydrophobic bile salts as evidenced by enhanced biliary recovery of phosphatidylserine, cholesterol, and ectoenzymes. In liver specimens from PFIC1 patients, but not in those from control subjects, ectoenzyme expression at the canalicular membrane was markedly deficient. In isolated mouse livers Atp8b1 deficiency impaired the transport of hydrophobic bile salts into bile. In conclusion, our study shows that Atp8b1 deficiency causes loss of canalicular phospholipid membrane asymmetry that in turn renders the canalicular membrane less resistant toward hydrophobic bile salts. The loss of phospholipid asymmetry may subsequently impair bile salt transport and cause cholestasis.