The objective of this work was to investigate the mechanisms of hepatobiliary toxicity caused by thienopyrimidone MCHR1 antagonists using BMS-773174 as a tool molecule. Co-administration of the pan CYP inhibitor 1-aminobenzotriazole with BMS-773174 prevented hepatobiliary damage, and direct delivery of the diol metabolite BMS-769750 caused hepatobiliary toxicity, identifying the diol and possibly its downstream hydroxyacid (BMS-800754) metabolite as the toxic species. Rat liver gene expression revealed treatment-related changes in hepatic transporters and induction of oval cell-specific genes including deleted malignant tumor 1 (Dmbt1). The metabolites did not alter hepatic transporter activities, suggesting that transporter-mediated cholestasis was not involved. Because injury to biliary epithelium can result in adaptive hyperplasia, rat biliary epithelial cells (BECs) were isolated and exposed to the oxidative metabolites. BMS-769750 was cytotoxic to BECs, but not rat hepatocytes, suggesting a role of the diol in biliary epithelial injury. BMS-800754 was cytotoxic to rat hepatocytes therefore its contribution to hepatocyte injury in rats is a possibility. Induction of Dmbt1 in rat BECs was investigated because of its role in hepatic progenitor cell differentiation/proliferation during injury. Dmbt1 mRNA was induced by BMS-769750, but not BMS-800754 in BECs; this induction and cellular injury was confirmed with diol metabolites formed by other compounds with the same hepatobiliary liability. In conclusion, hepatobiliary injury by thienopyrimidinone MCHR1 antagonists was driven through a CYP-mediated bioactivation pathway. Induction of Dmbt1 mRNA coupled with cellular injury suggests that injury of biliary epithelium may be the first step toward an adaptive proliferative response causing BDH by these compounds.