The human UDP glycosyltransferase (UGT) superfamily comprises four families of enzymes that catalyze the addition of sugar residues to small lipophilic chemicals. The UGT1 and UGT2 enzymes use UDP-glucuronic acid, and UGT3 enzymes use UDP-N-acetylglucosamine, UDP-glucose, and UDP-xylose to conjugate xenobiotics, including drugs and endobiotics such as metabolic byproducts, hormones, and signaling molecules. This metabolism renders the substrate more polar and more readily excreted from the body and/or functionally inactive. The fourth UGT family, called UGT8, contains only one member that, unlike other UGTs, is considered biosynthetic. UGT8 uses UDP galactose to galactosidate ceramide, a key step in the synthesis of brain sphingolipids. To date other substrates for this UGT have not been identified and there has been no suggestion that UGT8 is involved in metabolism of endo- or xenobiotics. We reexamined the functions of UGT8 and discovered that it efficiently galactosidates bile acids and drug-like bile acid analogs. UGT8 conjugates bile acids ∼60-fold more efficiently than ceramide based on in vitro assays with substrate preference deoxycholic acid >chenodeoxycholic acid > cholic acid > hyodeoxycholic acid > ursodeoxycholic acid. Activities of human and mouse UGT8 are qualitatively similar. UGT8 is expressed at significant levels in kidney and gastrointestinal tract (intestine, colon) where conjugation of bile acids is likely to be metabolically significant. We also investigate the structural determinants of UDP-galactose selectivity. Our novel findings suggest a new role for UGT8 as a modulator of bile acid homeostasis and signaling.