Purpose The intrahepatic “parallel channel sign” on gray‐scale sonograms is generally interpreted as representing dilated bile ducts, but it may also be caused by enlargement of intrahepatic arteries. This study was performed to evaluate the incidence of misinterpretation of the parallel channel sign without color Doppler sonography and the characteristics of patients in whom misinterpretation of the parallel channel sign is likely to occur. Methods A total of 1,100 patients were examined by sonography. All patients with a parallel channel sign on gray‐scale sonograms underwent color Doppler sonography. In addition, laboratory values related to cholestasis were measured. Results The parallel channel sign was observed in 57 patients (5.2%). In 35 (61%) of these patients, color Doppler sonography revealed blood flow in both lumina, indicating that the parallel channel sign was not caused by enlarged bile ducts. Eighty‐six percent of this group had nonbiliary liver disease; the enlarged hepatic artery branches were associated with liver cirrhosis in 63% of this group. Color Doppler sonography confirmed that the other 22 patients (39%) had an enlarged intrahepatic bile duct. Conclusions Use of color Doppler sonography can help avoid misinterpretation of the parallel channel sign, especially in patients with nonbiliary liver disease. © 1999 John Wiley & Sons, Inc. J Clin Ultrasound 27:426–432, 1999.