Bile formation is a key function of the liver and is driven by active secretion of bile salts and other organic compounds into the biliary tree. Bile salts represent the major organic constituent of bile. They are released with bile into the small intestine, where they are almost quantitatively reabsorbed and transported via the portal circulation back to the liver. In the liver, they are taken up into hepatocytes and secreted into bile. This cycling between the liver and the small intestine is called enterohepatic circulation of bile salts. Bile salts are secreted from hepatocytes into the bile by the bile salt export pump BSEP. This step constitutes the rate-limiting step of handling of bile salts in the liver and is the major driving force of the enterohepatic circulation of bile salts. Improper functioning of BSEP leads to an accumulation of bile salts within hepatocytes, where bile salts become cytotoxic. If persistent, accumulation of bile salts in hepatocytes will lead to liver disease. This review summarizes the essential concepts of bile formation and the current knowledge of mechanisms known to impair BSEP function. Finally, it sets the current therapeutic approaches for cholestatic liver disease into perspective to the pathophysiologic mechanisms of impaired BSEP function.