Despite improvements in imaging, serum CA19-9 and pathological evaluation, differentiating between benign and malignant bile duct strictures remains a diagnostic conundrum. Recent developments in next-generation sequencing (NGS) have opened new opportunities for early detection and management of cancers but, to date, have not been rigorously applied to biliary specimens. We prospectively evaluated a 28-gene NGS panel (BiliSeq) using endoscopic retrograde cholangiopancreatography-obtained biliary specimens from patients with bile duct strictures. The diagnostic performance of serum CA19-9, pathological evaluation and BiliSeq was assessed on 252 patients (57 trainings and 195 validations) with 346 biliary specimens. The sensitivity and specificity of BiliSeq for malignant strictures was 73% and 100%, respectively. In comparison, an elevated serum CA19-9 and pathological evaluation had sensitivities of 76% and 48%, and specificities of 69% and 99%, respectively. The combination of BiliSeq and pathological evaluation increased the sensitivity to 83% and maintained a specificity of 99%. BiliSeq improved the sensitivity of pathological evaluation for malignancy from 35% to 77% for biliary brushings and from 52% to 83% for biliary biopsies. Among patients with primary sclerosing cholangitis (PSC), BiliSeq had an 83% sensitivity as compared with pathological evaluation with an 8% sensitivity. Therapeutically relevant genomic alterations were identified in 20 (8%) patients. Two patients with -amplified cholangiocarcinoma received a trastuzumab-based regimen and had measurable clinicoradiographic response. The combination of BiliSeq and pathological evaluation of biliary specimens increased the detection of malignant strictures, particularly in patients with PSC. Additionally, BiliSeq identified alterations that may stratify patients for specific anticancer therapies.