Ulcerative Colitis (UC) is a common disorder that manifests as chronic,recurring, colonic inflammation. Dysregulation of epithelial barrier function, occuring as a consequence of increased apoptosis or altered tight junction (TJ) integrity, is a pivotal step in UC pathogenesis. Monocytes are key effectors of the inflammatory response in UC and regulate epithelial function through the production of cytokines and mediators. Ursodeoxycholic acid (UDCA), a naturally-occurring bile acid formed by bacterial metabolism in the colon, has well-established cytoprotective and anti-inflammatory properties and has been shown to be beneficial in animal models of UC. The aim of this study was to determine whether altered monocyte-epithelial interactions may contribute to the anti-inflammatory actions of UDCA. U937 monocytes were treated with UDCA [100 µM] for 24 hrs prior to their addition to the basolateral side of T84 colonic epithelial cell monolayers. Barrier function was assessed as changes in transepithelial resistance (TER) or in paracellular permeability to FITC-dextran. Levels of cleaved PARP and caspase 3, and expression of the tight junction (TJ) protein, occludin, were measured by western blotting. Co-culture with monocytes caused a 63.6 ± 3.5 % decrease in TER (n = 17; p < 0.001) and an 8.2 ± 2.0 fold increase in paracellular permeability (n = 6; p < 0.01) across T84 cell monolayers. UDCA treatment significantly attenuated these effects. Monocyte-induced disruptions of epithelial barrier function were not due to cellular toxicity, as assessed by LDH release. Analysis of cleaved PARP and caspase 3 suggest that the effects of monocytes were not due to induction of apoptosis. However, co-culture with monocytes did cause a significant decrease in phosphorylation of occludin (n = 3; p < 0.05), suggesting that alterations in TJs may be involved. Monocyte-induced disruption of epithelial barrier function was mediated by a heat stable and cyclooxygenase-2 independent soluble factor, which we have named monocyte-derived factor (MDF) (n = 6; p < 0.01). Interestingly, studies using conditioned medium from monocytes suggest that the protective effects of UDCA are not due to inhibition of MDF release from monocytes nor are they due to a direct protective effect at the level of the epithelium. In summary, our data suggest that monocytes disrupt colonic epithelial barrier function through production of a heat stable soluble mediator that acts, at least partly, at tight junctions to increase paracellular permeability. UDCA prevents monocyte/epithelial crosstalk by an, as yet, unknown mechanism to prevent disruptions in barrier function. In conclusion, by virtue of its ability to preserve epithelial barrier function under inflammatory conditions, UDCA is an attractive target for development of new approaches to treat UC.