Intestinal and systemic illnesses have been linked to increased gut permeability. Bile acids, whose luminal profile can be altered in human disease, modulate intestinal paracellular permeability. We have investigated the mechanism by which selected bile acids increase gut permeability using a validated in vitro model. Human intestinal Caco-2 cells were grown in monolayers and challenged with a bile acids panel. Transepithelial electrical resistance (TEER) and luminal to basolateral fluxes of 10 kDa Cascade blue conjugated-dextran were used to monitor paracellular permeability. Immunoprecipitation and immunoblot analysis were employed to investigate the intracellular pathway. Redistribution of tight junction proteins was studied by confocal laser microscopy. Micromolar concentrations of cholic, deoxycholic (DCA), chenodeoxycholic acid (CDCA) but not ursodeoxycholic (UDCA) decreased TEER and increased dextran flux in a reversible fashion. Co-incubation of 50 µM CDCA or DCA with EGF, anti-EGF monoclonal antibody or specific src inhibitor PP-2, abolished the effect. 50 µM of either CDCA or DCA also induced EGFR phosphorylation, occludin dephosphorylation and occludin redistribution at the tight junction level in the same timeframe and reversible fashion. We conclude that selected bile acids modulate intestinal permeability via EGFR auto-phosphorylation, occludin dephosphorylation and rearrangement at the tight junction level. The effect is mediated by the src family kinases and is abolished by EGF treatment. These data also provide support to the role of bile acids in the genesis of necrotizing enterocolitis and the protective effect of EGF treatment.