The association between obstructive jaundice and postoperative acute renal failure has been originally described more than eight decades ago and is now a well-established clinical phenomenon. Acute renal failure occurs in 8 to 10% of patients requiring surgery for relief of obstructive jaundice and contributes to eventual mortality in 70 to 80% of those who develop it. A major factor that may underlie the susceptibility to renal failure in patients with obstructive jaundice is cardiovascular instability manifested as systemic hypotension and defective vascular reactivity. This article outlines the scope of the clinical association between jaundice and renal failure and reviews the clinical and experimental studies that have contributed to our understanding of the underlying pathophysiologic mechanisms for this phenomenon. A growing body of evidence emanating from these studies indicates that bile constituents (e.g., bile acids, bilirubin, cholesterol) do not exert a direct nephrotoxic effect. Rather, the retention of bile during cholestatic jaundice has deleterious effects on cardiovascular function and on blood volume. This, in turn, sensitizes the kidney to prerenal failure and acute tubular necrosis in postsurgical patients with obstructive jaundice. The institution of prophylactic measures based on the appreciation of these underlying pathogenic mechanisms may result in an improvement in the overall prognosis of jaundiced patients undergoing surgery.