Bile production occurs in the liver, where specialized cells called hepatocytes create bile, a digestive fluid essential for breaking down fats. This process involves the synthesis of bile acids from cholesterol, which are then combined with other components like bilirubin, water, and electrolytes to form bile. Once produced, bile is stored in the gallbladder until needed for digestion. When food enters the small intestine, the gallbladder releases bile to help emulsify fats, making them easier for enzymes to digest. This process is crucial for nutrient absorption and maintaining overall digestive health.