LKB1 is a ‘master’ protein kinase implicated in the regulation of metabolism, cell proliferation, cell polarity and tumorigenesis. However, the long-term role of LKB1 in hepatic function is unknown. In the present study, it is shown that hepatic LKB1 plays a key role in liver cellular architecture and metabolism. We report that liver-specific deletion of LKB1 in mice leads to defective canaliculi and bile duct formation, causing impaired bile acid clearance and subsequent accumulation of bile acids in serum and liver. Concomitant with this, it was found that the majority of BSEP (bile salt export pump) was retained in intracellular pools rather than localized to the canalicular membrane in hepatocytes from LLKB1KO (liver-specific Lkb1-knockout) mice. Together, these changes resulted in toxic accumulation of bile salts, reduced liver function and failure to thrive. Additionally, circulating LDL (low-density lipoprotein)-cholesterol and non-esterified cholesterol levels were increased in LLKB1KO mice with an associated alteration in red blood cell morphology and development of hyperbilirubinaemia. These results indicate that LKB1 plays a critical role in bile acid homoeostasis and that lack of LKB1 in the liver results in cholestasis. These findings indicate a novel key role for LKB1 in the development of hepatic morphology and membrane targeting of canalicular proteins.