Profuse hemorrhage into the biliary tract—major hemobilia,—is an alarming condition which attracts much attention. Minor hemobilia, often caused by gallstones or operative injury, is much more frequent, yet often neglected. Clinical observations indicate that minor hemobilia is not always an innocent condition with the blood remaining fluid and unobtrusively flowing into the intestine. Examples are given where clots from occult hemobilia have caused diagnostic errors or obstructed the bile flow, thus imitating gallstones for which they may be mistaken. Experiments have been performed to elucidate the pathophysiology of this clot formation: 1) A model of the biliary tract was constructed with bile flowing through it. When blood was injected forcefully to simulate a major hemorrhage, mixed clots of blood and bile were formed. When introduced gently, as in minor hemobilia, the blood flowed immiscibly to the lowest level where it formed a clot of pure blood. The clots dissolved under the influence of flowing bile, but remained intact when protected from the flow. 2) Mixed clots were mushy and dissolved spontaneously, while pure clots remained solid and stable. When clots containing increasing amounts of bile were incubated, increasing amounts of cleavage products of fibrinogen and fibrin were formed. 3) Blood clots were produced in gallbladders of 33 dogs. Pure clots remained solid and floating while mixed clots formed a mushy layer, strongly adherent to the mucosa. Both kinds of clots disappeared after two-four weeks, but remained if bile flow was diverted. These findings explain why under certain circumstances minor hemobilia acquires clinical significance by forming clots that may obstruct the flow or cause diagnostic errors. Successful dissolution of “retained stones” may occasionally have the simple explanation that blood clots, mistaken for calculi, have been fibrinolysed. Consequently, in biliary obstruction or when defects are found on cholangiography, the possibility of blood clots in the ducts should be considered even in the absence of overt gastrointestinal hemorrhage.