Large numbers (10(4) to greater than 10(5)/ml) of Type I water-resistant Giardia lamblia cysts were produced in vitro under conditions that are characteristic of the human intestinal lumen. We define Type I cyst morphology as oval shaped, smooth, and refractile, with cyst wall, axostyle, and median body visible in relief by Normarski differential interference contrast optics. Human and porcine bile induced higher levels of encystation than bovine bile at the alkaline pH (7.8) which occurs in the human lower small intestine. High-pressure liquid chromatography analysis showed that the porcine bile had a preponderance of hyocholate, rather than cholate, while bovine bile had less chenodeoxycholate and more deoxycholate than human bile. Lactic acid, a major product of bacterial metabolism in the human colon, further stimulated encystation. Growth of the preencystation culture without bile also increased subsequent encystation. More than 90% of Type I cysts produced with porcine bile plus lactic acid were viable as indicated by the uptake and retention of fluorescein diacetate and exclusion of propidium iodide. Biological activity of in vitro-derived water-resistant cysts was demonstrated by the observation that 1 to 9.5% excysted in vitro. The percentage of excystation was greatly decreased following encystation at pH 7.0 or by omission of bile or lactic acid. This is the first quantitative in vitro demonstration of the complete life cycle of G. lamblia from humans.