Phosphatidylethanolamine N-methyltransferase (PEMT) is a hepatic integral membrane protein localized to the endoplasmic reticulum (ER). PEMT catalyzes approximately 30% of hepatic phosphatidylcholine (PC) biosynthesis. Pemt(-/-) mice fed a high-fat diet (HFD) develop steatohepatitis. Interestingly, portions of the ER located close to the canaliculus are enriched in PEMT. Phospholipid balance and asymmetrical distribution by adenosine triphosphatase phospholipid transporting 8B1 (ATP8B1) on the canalicular membrane is required for membrane integrity and biliary processes. We hypothesized that PEMT is an important supplier of PC to the canaliculus and that PEMT activity is critical for the maintenance of canalicular membrane integrity and bile formation following HFD feeding when there is an increase in overall hepatic PC demand. Pemt(+/+) and Pemt(-/-) mice were fed a chow diet, an HFD, or a choline-supplemented HFD. Plasma and hepatic indices of liver function and parameters of bile formation were determined. Pemt(-/-) mice developed cholestasis, i.e, elevated plasma bile acid (BA) concentrations and decreased biliary secretion rates of BAs and PC, during HFD feeding. The maximal BA secretory rate was reduced more than 70% in HFD-fed Pemt(-/-) mice. Hepatic ABCB11/bile salt export protein, responsible for BA secretion, was decreased in Pemt(-/-) mice and appeared to be retained intracellularly. Canalicular membranes of HFD-fed mice contained fewer invaginations and displayed a smaller surface area than Pemt(+/+). mice. Choline supplementation (CS) prevented and reversed the development of HFD-induced cholestasis. Conclusion: We propose that hepatic PC availability is critical for bile formation. Dietary CS might be a potential noninvasive therapy for a specific subset of patients with cholestasis.