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The transjugular intrahepatic portosystemic shunt has recently become widely used for portal decompression. Shunt stenosis resulting from pseudointimal hyperplasia and hepatic encephalopathy are emerging as important midterm complications of the procedure. Bile extravasation caused by bile duct transection by the stent wires has been suggested as a cause of the pseudo-intimal hyperplasia. The present case report describes a 6 1/2-month-old transjugular intrahepatic portosystemic shunt in which apparent biliary epithelial proliferation had formed large cyst-like spaces within the pseudo-intima at the site of shunt stenosis. We hypothesize that secretory products from these biliary epithelial cells may have contributed to shunt stenosis by creating expansile cysts or by stimulating pseudointimal hyperplasia. In addition, we found a large, recent Zahn's infarct adjacent to the stent. Pseudointimal hyperplasia had extended from the stent wires into the orifices of contiguous small portal and hepatic vein branches. The resulting stenosis of these small veins may have contributed to the Zahn's infarct.