&NA;The liver biopsy constitutes an important tool in the evaluation and diagnosis of children with neonatal cholestasis. Giant cell transformation, bile ductular proliferation, and paucity of interlobular bile ducts are the basic morphologic changes. Whereas giant cell transformation constitutes a nonspecific reaction of the liver in newborns and infants, bile duct proliferation and duct paucity have clinical implications. The former signals the need for surgical intervention and the latter a conservative medical approach. Both morphologic patterns may overlap, however, and need to be interpreted by taking the clinical, genetic, and laboratory findings into consideration. This approach emphasizes the close collaboration between the pediatric gastroenterologist and the pathologist for correct identification and management of the disease.