Although bacterial lipopolysaccharides (LPS) are known to cause cholestasis in sepsis, the molecular mechanisms accounting for this effect are only partially known. As aquaporin-8 (AQP8) seems to facilitate the canalicular osmotic water movement during hepatocyte bile formation, we studied its gene and functional expression in LPS-induced cholestasis. By subcellular fractionation and immunoblotting analysis, we found that 34 kDa AQP8 was significantly decreased by 70% in plasma (canalicular) and intracellular (vesicular) liver membranes. However, expression and subcellular localization of hepatocyte sinusoidal AQP9 were unaffected. Immunohistochemistry for liver AQPs confirmed these observations. Osmotic water permeability (P_f) of canalicular membranes, measured by stopped-flow spectrophotometry, was significantly reduced (65 ± 1 vs. 49 ± 1 µm.sec^-1) by LPS, consistent with defective canalicular AQP8 functional expression. By Northern blotting, we found that 1.5 kb AQP8 mRNA expression was increased by 80%, suggesting a post-transcriptional mechanism of protein reduction. The TNF receptor fusion protein TNFp75:Fc prevented the LPS-induced impairment of AQP8 expression and bile flow, suggesting the cytokine TNF as a major mediator of LPS effect. Accordingly, studies in hepatocyte primary cultures indicated that recombinant TNF down-regulated AQP8. The effect of TNF was prevented by the lysosomal protease inhibitors leupeptin or chloroquine or by the proteasome inhibitors MG132 or lactacystin, suggesting a cytokine-induced AQP8 proteolysis. In conclusion, our data suggest that LPS induces the TNF mediated post-transcriptional down-regulation of AQP8 functional expression in hepatocytes, a mechanism potentially relevant to the molecular pathogenesis of sepsis-associated cholestasis.