Since biguanides are known to inhibit hexose and amino acid absorption in vivo and in vitro as well as vitamin B12 absorption the effect of phenethylbiguanide on taurocholate (TC) and water absorption was measured in rat ileum in vivo. Phenethylbiguanide exhibited a time-dependent inhibitory effect on TC- and water absorption. If the bile acid inhibitory effect of biguanides can be found in diabetics on treatment with biguanides it might explain the observed cholesterol-lowering effect of these oral antidiabetic drugs.