To better understand the regulation of biliary phospholipid and cholesterol excretion, canalicular membranes were isolated from the livers of C57BL/6J mice and abundant proteins separated by SDS-PAGE and identified by matrix-assisted laser desorption/ionization mass spectrometry. A prominent protein revealed by this analysis was betaine homocysteine methyltransferase (BHMT). This enzyme catalyzes the first step in a three-enzyme pathway that promotes the methylation of phosphatidylethanolamine (PE) to phosphatidylcholine (PC). Immunoblotting confirmed the presence of BHMT on the canalicular membrane, failed to reveal the presence of the second enzyme in this pathway, methionine adenosyltransferase, and localized the third enzyme of the pathway, PE N-methyltransferase (PEMT). Furthermore, immunfluorescence microscopy unambiguously confirmed the localization of PEMT to the canalicular membrane. These findings indicate that a local mechanism exists in or around hepatocyte canalicular membranes to promote phosphatidylethnolamine methylation and PC biosynthesis. Finally, immunoblotting revealed the presence and immunofluorescence microscopy unambiguously localized the scavenger receptor class B type I (SR-BI) to the canalicular membrane. Therefore, SR-BI, which is known to play a role in cholesterol uptake at the hepatocyte basolateral membrane, may also be involved in biliary cholesterol excretion. Based on these findings, a model is proposed in which local canalicular membrane PC biosynthesis in concert with the phospholipid transporter mdr2 and SR-BI, promotes the excretion of phospholipid and cholesterol into the bile.