Polarization of hepatocytes is manifested by bile canalicular network formation and activation of LKB1 and AMPK, which control cellular energy metabolism. The bile acid, taurocholate, also regulates development of the canalicular network through activation of AMPK. In the present study, we used collagen sandwich hepatocyte cultures from control and liver-specific LKB1 knockout mice to examine the role of LKB1 in trafficking of ABCB11, the canalicular bile acid transporter. In polarized hepatocytes, ABCB11 traffics from Golgi to the apical plasma membrane and endogenously cycles through the rab 11a-myosin Vb recycling endosomal system. LKB1 knockout mice were jaundiced, lost weight and manifested impaired bile canalicular formation and intracellular trafficking of ABCB11, and died within three weeks. Using live cell imaging, fluorescence recovery after photobleaching (FRAP), particle tracking, and biochemistry, we found that LKB1 activity is required for microtubule-dependent trafficking of ABCB11 to the canalicular membrane. In control hepatocytes, ABCB11 trafficking was accelerated by taurocholate and cAMP; however, in LKB1 knockout hepatocytes, ABCB11 trafficking to the apical membrane was greatly reduced and restored only by cAMP, but not taurocholate. cAMP acted through a PKA-mediated pathway which did not activate AMPK. Our studies establish a regulatory role for LKB1 in ABCB11 trafficking to the canalicular membrane, hepatocyte polarization, and canalicular network formation.