Cholestasis is a chronic liver disease with limited therapeutic options. Hydrophobic bile acid-induced hepatobiliary injury is a major pathological driver of cholestasis progression. This study investigates the anti-cholestasis efficacy and mechanisms of action of glycine-conjugated β-muricholic acid (Gly-β-MCA). We use female Cyp2c70 KO mice, a rodent cholestasis model that does not produce endogenous muricholic acid (MCA) and exhibits a “human-like” hydrophobic bile acid pool and female-dominant progressive hepatobiliary injury and portal fibrosis. The efficacy of Gly-β-MCA and ursodeoxycholic acid (UDCA), the first line drug for cholestasis, on cholangiopathy and portal fibrosis are compared. At a clinically relevant dose, Gly-β-MCA shows comparable efficacy as UDCA in reducing serum transaminase, portal inflammation and ductular reaction, and better efficacy than UDCA against portal fibrosis. Unlike endogenous bile acids, orally administered Gly-β-MCA is absorbed at low efficiency in the gut and enters the enterohepatic circulation mainly after microbiome-mediated deconjugation, which leads to taurine-conjugated MCA enrichment in bile that alters enterohepatic bile acid pool composition and reduces bile acid pool hydrophobicity. Gly-β-MCA also promotes fecal excretion of endogenous hydrophobic bile acids and decreases total bile acid pool size, while UDCA treatment does not alter total bile acid pool. Furthermore, Gly-β-MCA treatment leads to gut unconjugated MCA enrichment and reduces gut hydrophobic lithocholic acid (LCA) exposure. In contrast, UDCA treatment drives a marked increase of LCA flux through the large intestine. In conclusion, Gly-β-MCA is a potent anti-cholestasis agent with potential clinical application in treating human cholestasis.