Alternative models explaining the biliary lipid secretion at the canalicular membrane of hepatocytes exist: successive lipid extraction by preformed bile salt micelles, or budding of membrane fragments with formation of mixed micelles. To test the feasibility of the latter mechanism, we developed a mathematical model that describes the formation of lipid microdomains in the canalicular membrane. Bile salt monomers intercalate into the external hemileaflet of the canalicular membrane, to form a rim to liquid disordered domain patches that then pinch off to form nanometer-scale mixed micelles. Model simulations perfectly recapitulate the measured dependence of bile salt-dependent biliary lipid extraction rates upon modulation of the membrane cholesterol (lack or overexpression of the cholesterol transporter Abcg5-Abcg8) and phosphatidylcholine (lack of Mdr2, also known as Abcb4) content. The model reveals a strong dependence of the biliary secretion rate on the protein density of the membrane. Taken together, the proposed model is consistent with crucial experimental findings in the field and provides a consistent explanation of the central molecular processes involved in bile formation.