Progressive familial intrahepatic cholestasis can be caused by mutations in ABCB4 or ATP8B1; each encodes a protein that translocates phospholipids, but in opposite directions. ABCB4 flops phosphatidylcholine from the inner to the outer leaflet, where it is extracted by bile salts. ATP8B1, in complex with the accessory protein CDC50A, flips phosphatidylserine in the reverse direction. Abcb4(-/-) mice lack biliary secretion of phosphatidylcholine, whereas Atp8b1-deficient mice have increased excretion of phosphatidylserine into bile. Each system is thought to have a role protecting the canalicular membrane from bile salts. To investigate the relationship between the mechanisms of ABCB4 and ATP8B1, we expressed the transporters separately and together in cultured cells and studied viability and phospholipid transport. We also created mice with disruptions in ABCB4 and ATP8B1 (double knockouts) and studied bile formation and hepatic damage in mice fed bile salts. Overexpression of ABCB4 was toxic to HEK293T cells; the toxicity was counteracted by coexpression of the ATP8B1-CDC50A complex. In Atp8b1-deficient mice, bile salts induced extraction of phosphatidylserine and ectoenzymes from the canalicular membrane; this process was not observed in the double-knockout mice. ATP8B1 is required for hepatocyte function, particularly in the presence of ABCB4. This is most likely because the phosphatidylserine flippase complex of ATP8B1-CDC50A counteracts the destabilization of the membrane that occurs when ABCB4 flops phosphatidylcholine. Lipid asymmetry is therefore important for the integrity of the canalicular membrane; ABCB4 and ATP8B1 cooperate to protect hepatocytes from bile salts.