Liver cysts arising from hepatic bile ducts are a common extra-renal pathology associated with both autosomal dominant and recessive polycystic kidney disease in humans. To elucidate the functional and structural changes inherent in cyst formation and growth, hepatic bile duct epithelia were isolated from the BALB/ c-cpk mouse model of polycystic kidney disease. Light and transmission electron microscopy revealed substantial fibrosis in the basal lamina surrounding hepatic bile duct cysts isolated from heterozygous (BALB/c-cpk/+) and homozygous (BALB/c-cpk/cpk) animals. Scanning electron microscopy and length analysis of normal, precystic and cystic bile ducts provided the unique observation that primary cilia in cholangiocytes isolated from bile ducts and cysts of animals expressing the mutated cpk gene had lengths outside the minimal and maximal ranges of those in cells lining bile ducts of wild-type animals. Based on the hypothesis that PKD is one of several diseases characterized as ciliopathies, this abnormal variability in the length of the primary cilia may have functional implications. Electrophysiological analyses of freshly isolated cysts indicate that the amiloride-sensitive epithelial Na(+) channel (ENaC) is inactive/absent and cAMP-mediated anion secretion is the electrogenic transport process contributing to cyst fluid accumulation. Anion secretion can be stimulated by the luminal stimulation of adenylyl cyclase.