Although water channel aquaporin-8 (AQP8) has been implicated in hepatic bile formation and liver diseases associated with abnormal bile flow in human and animal studies, direct evidence of its involvement in bile secretion is still lacking. This study aimed to determine the role of AQP8 in bile secretion and gallstone formation. We generated various transgenic knock-in and knockout mouse models and assessed liver AQP8 expression by immunostaining and immunoblotting, hepatic bile secretion by cannulation of the common bile duct, cholesterol gallstone formation by feeding a high-fat lithogenic diet, and identified regulatory small molecules by screening the organic fractions of cholagogic Chinese herbs and biochemical characterization. We identified a novel expression pattern of AQP8 protein in the canalicular membrane of approximately 50% of the liver lobules. AQP8-deficient mice exhibited impaired hepatic bile formation, characterized by the secretion of concentrated bile with a lower flow rate and higher levels of bile lipids than that of wild-type littermates. AQP8-/- mice showed accelerated gallstone formation, which was rescued by AAV-mediated hepatic expression of AQP8 or AQP1. Moreover, we identified a small molecule, scutellarin, that upregulates hepatocyte AQP8 expression in vitro and in vivo. In AQP8+/+ mice, scutellarin significantly increased bile flow, decreased bile lipid concentrations, and prevented gallstone formation compared to AQP8-/- mice. Molecular studies revealed that scutellarin promoted the ubiquitination and degradation of HIF-1α, a transcriptional negative regulator of AQP8, by disrupting its interactions with HSP90. AQP8 plays a crucial role in facilitating water transport and bile dilution during hepatic bile formation, thereby mitigating gallstone formation in mice. Small-molecule intervention validated hepatocyte AQP8 as a promising drug target for gallstone therapy. The incidence of gallstone disease is high, and current drug treatments for gallstones are very limited, necessitating the identification of novel drug targets for developing new drugs with universal applicability. To our knowledge, this is the first study to provide direct evidence that hepatic water channel AQP8 plays a key role in bile dilution and gallstone formation. Modulation of hepatic water transport may provide a universal therapeutic strategy for all types of gallstone diseases.