The differential diagnosis of liver diseases or jaundice is almost as thorny a problem today as it was before the development of modern tests for determination of hepatic function. This differential diagnosis is still made more easily on the basis of clinical observations than on the basis of laboratory studies. The inadequacy of laboratory procedures does not result from ignorance of hepatic physiology, the understanding of which has rapidly expanded within the last decade. This shortcoming is chiefly due to two factors: 1. Almost none of the so-called liver function tests available measure a basic function of the liver, in contrast, for example, to tests of renal function. 2. Most hepatic diseases are composed of several basic pathological processes, each of which influences the results of the hepatic tests in a different way. In an attempt to overcome these difficulties it appears justified to describe the different processes and their