X-linked myotubular myopathy (XLMTM) is a fatal congenital disorder caused by mutations in the MTM1 gene. Currently, there are no approved treatments, though AAV8-mediated gene transfer therapy has shown promise in animal models and preliminarily in patients. However, four patients with XLMTM treated with gene therapy have died from progressive liver failure, and hepatobiliary disease has now been recognized more broadly in association with XLMTM. In an attempt to understand whether loss of MTM1 itself is associated with liver pathology, we have characterized a novel liver phenotype in a zebrafish model of this disease. Specifically, we have found that loss-of-function mutations in mtm1 lead to severe liver abnormalities including impaired bile flux, structural abnormalities of the bile canaliculus, and improper endosomal-mediated trafficking of canalicular transporters. Using a reporter tagged Mtm1 zebrafish line, we have established localization of Mtm1 in the liver in association with Rab11 and canalicular transport proteins, and demonstrated that hepatocyte specific re-expression of Mtm1 can rescue the cholestatic phenotype. Lastly, we completed a targeted chemical screen, and found that Dynasore, a dynamin II inhibitor, is able to partially restore bile flow and transporter localization to the canalicular membrane. In summary, we demonstrate for the first time liver abnormalities that are directly caused by MTM1 mutation in a pre-clinical model, thus establishing the critical framework for better understanding and comprehensive treatment of the human disease.