Diagnosis of biliary atresia (BA) can involve uncertainties. In the present prospective multicenter study, we considered whether urinary oxysterols represent a useful marker for diagnosis of BA in Japanese children. Subjects under 6 months old at 7 pediatric centers in Japan were prospectively enrolled, including patients with cholestasis and healthy controls (HC) without liver disease. Patients with cholestasis constituted 2 groups representing BA patients and others with cholestasis from other causes (non-BA). We quantitatively analyzed 7 oxysterols including 4β-, 20(S)-, 22(S)-, 22(R)-, 24(S)-, 25-, and 27-hydroxycholesterol by liquid chromatography/electrospray ionization-tandem mass spectrometry. Enrolled subjects included 14 with BA (median age 68 days; range 26–170) and 10 non-BA cholestatic controls (59; 14–162), as well as 10 HC (57; 25–120). Total urinary oxysterols were significantly greater in BA (median, 153.0 μmol/mol creatinine; range 24.1–486.7; P < 0.001) and non-BA (36.2; 5.8–411.3; P < 0.05) than in HC (2.7; 0.8–7.6). In patients with BA, urinary 27-hydroxycholesterol (3.61; 0.42–11.09; P < 0.01) was significantly greater than in non-BA (0.71; 0–5.62). In receiver operating characteristic (ROC) curve analysis for distinguishing BA from non-BA, the area under the ROC curve for urinary 27-hydroxycholesterol was 0.83. In conclusion, this first report of urinary oxysterol analysis in patients with BA indicated that 27-hydroxycholesterol may be a useful marker for distinguishing BA from other causes of neonatal cholestasis.