A method is provided to measure modulation of bile salt export transport and/or formation activity in hepatocyte or stable cell line preparations by test agents including but not limited to drugs, drug candidates, biologicals, food components, herb or plant components, proteins, peptides, DNA, RNA. Furthermore, the method is to determine modulation of bile salt export transport and/or formation activity not only by said test agents, but further their metabolites or bio transformed products formed in situ. The bile salt export transport and/or formation activity modulation includes but not limited to inhibition, induction, activation and/or regulation. The method can be practiced to identify test agents, which have potential to cause liver injury, drug-drug interactions, and/or can be used as therapeutic agents for the treatment of cholestasis, abnormality of bile salt metabolism, liver diseases and cholesterol abnormality.