Significance Obesity is associated with hepatic steatosis and activation of the cJun NH ₂ -terminal kinase (JNK) stress-signaling pathway. Studies in mice demonstrate that JNK deficiency in the liver prevents the development of hepatic steatosis. This observation suggests that inhibition of JNK signaling may represent a possible treatment for hepatic steatosis. However, the long-term consequences of JNK inhibition are poorly understood. Here we demonstrate that loss of JNK causes changes in cholesterol and bile acid metabolism that promote cholestasis, bile duct proliferation, and intrahepatic cholangiocarcinoma. We identify PPARα activation as the molecular mechanism that accounts for this phenotype. Our analysis has important implications for the long-term use of JNK inhibitors for the treatment of obesity.