Mice homozygous for a disruption in the Mdr2 gene (Mdr2 (-/-) mice) lack the Mdr2 P-glycoprotein (P-gp) in the canalicular membrane of the hepatocyte and are unable to excrete phosphatidylcholine into the bile. These mice develop a nonsuppurative cholestatic liver disease, presumably caused by the high concentrations of free cytotoxic bile acids in bile. We generated transgenic mice that express the human homolog of Mdr2, MDR3, specifically in the liver by the use of an albumin promoter. In these mice the MDR3 P-gp is exclusively located in the canalicular membrane of hepatocytes and phospholipid excretion into bile is restored. Mice that contain the same amount of MDR3 P-gp as that of Mdr2 P-gp in wild-type mice, also excrete the same amount of phospholipids. No histopathological abnormalities were observed in the livers of these mice. In mice that express MDR3 at a higher or lower level, the phospholipid excretion correlated with the amount of MDR3 P-gp. We conclude that the human MDR3 P-gp is functionally homologous to the murine Mdr2 P-gp and that it can fully replace this P-gp in Mdr2 (-/-) mice, restoring the excretion of phospholipids into the bile. The phospholipid excretion is limited by the amount of MDR3 or Mdr2 P-gp. The excretion of cholesterol is not tightly coupled to the excretion of phospholipids in these mice, because a very low phospholipid excretion level is sufficient to give almost wild-type cholesterol excretion into the bile.