While bile acids are important for both digestion and signalling, hydrophobic bile acids can be harmful, especially when in high concentrations. Mechanisms for the protection of cholangiocytes against bile acid cytotoxicity include negative feedback loops via farnesoid X nuclear receptor (FXR) activation, the bicarbonate umbrella, cholehepatic shunting and anti-inflammatory signalling, among others. By altering or overwhelming these defence mechanisms, cholestatic diseases such as primary biliary cholangitis (PBC) and primary sclerosing cholangitis (PSC) can further progress to biliary cirrhosis, end-stage liver disease and death or liver transplantation. While PBC is currently treated with ursodeoxycholic acid (UDCA) and obeticholic acid (OCA), many fail treatment, and we have yet to find an effective therapy for PSC. Novel therapies under evaluation target nuclear and surface receptors including FXR, transmembrane G-protein-coupled receptor 5 (TGR5), peroxisome proliferator-activated receptor (PPAR) and pregnane X receptor (PXR). Modulation of these receptors leads to altered bile composition, decreased cytotoxicity, decreased inflammation and improved metabolism. This review summarizes our current understanding of the role of bile acids in the pathophysiology of cholestatic liver diseases, presents the rationale for already approved medical therapies and discusses novel pharmacologic therapies under investigation.