Indomethacin is a powerful analgesic nonsteroidal anti-inflammatory drug (NSAID), but is limited in use by its primary side effect to cause gastrointestinal bleeding and serious injury. One factor important for exacerbating NSAID injury is the presence of bile acids, which may interact with indomethacin to form toxic mixed micelles in the gut. The development of a safer gastrointestinal formulation of indomethacin that is chemically complexed with phosphatidylcholine (PC-indomethacin) may offer an improved therapeutic agent, particularly in the presence of bile acid, but its potential protective mechanism is incompletely understood. Intestinal epithelial cells (IEC-6) were tested for injury with indomethacin (alone and plus various bile acids) compared with PC-indomethacin (alone and plus bile acids). To explore a role for bile acid uptake into cells as a requirement for NSAID injury, studies were performed using Madin-Darby canine kidney cells transfected with the apical sodium-dependent bile acid transporter (ASBT). Indomethacin, but not PC-indomethacin, was directly and dose-dependently injurious to IEC-6 cells. Similarly, the combination of any bile acid plus indomethacin, but not PC-indomethacin, induced cell injury. The expression of ASBT had a modest effect on the acute cytotoxicity of indomethacin in the presence of some conjugated bile acids. Complexing PC with indomethacin protected against the acute intestinal epithelial injury caused by indomethacin regardless of the presence of bile acids. The presence of luminal bile acid, but not its carrier-mediated uptake into the enterocyte, is required for acute indomethacin-induced cell injury. It is likely that initial cell damage induced by indomethacin occurs at or near the cell membrane, an effect exacerbated by bile acids and attenuated by PC.