Ductular reactions inevitably co-occur with liver tissue injury along with inflammation, cholestasis, and fibrosis. However, it remains unknown whether they represent an adaptive response facilitating bile drainage, or if they exacerbate dysfunction. By using a reporter mouse with cholangiocyte-specific deletion of the pattern recognition receptor RAGE, specific effects of the DR could be differentiated from the consequences of the cytotoxicity of the CDE-diet. While CDE-diet induced hepatoxicity triggers the DR via RAGE-dependent DAMP-sensing on cholangiocytes, it does not itself lead to loss of liver function. Instead, the presence of DR causes downregulation of basolateral bile acid transporters. Thus, although the DR forms a contiguous network capable of draining bile, it remains unutilized due to interrupted bile acid transport from blood to hepatocytes. The de-differentiating influence of the DR on hepatocytes thereby results in cholestasis and eventual fibrosis, that are more insidious to liver function than its initial cytotoxic trigger.