Background: The present study was designed to comparatively assess alteration of biochemical parameters in bile duct cancer and gall stone disease. Materials and Methods: A hospital based case-control study was carried out in the Department of Biochemistry of Manipal Teaching Hospital, Pokhara, Nepal between $1^{st}$ January 2010 and $31^{st}$ December 2012. The variables collected were age, gender, serum total cholesterol, total bilirubin, AST, ALT, serum alkaline phosphatase, albumin and hemoglobin. One way ANOVA was used to examine the statistical significance of differences between groups. A post-hoc LSD test was applied for the comparison of means of control versus case groups. A p-value of <0.05 (two-tailed) was considered significant. Results: The mean age of cases and controls was $53.2{pm}21.2$ years. The levels of serum cholesterol were higher in cases of cancer $192.5{pm}21.5$ mg/dl in comparison to stone cases $168.7{pm}16.1$ mg/dl (p value: 0.0001). The total bilirubin showed the marked difference in cases of cancer $7.6{pm}3.2$ mg/dl in comparison to stone cases $2.5{pm}0.8$ mg/dl of bile duct. There was discernible divergence in values of alkaline phosphatase in cases of cancer $251.5{pm}20.1$ IU/l when compared to stone cases $173.2{pm}12.6$ IU/l of bile duct. In contrast, there was no apparent deviation in values of aspartate transaminases and alanine transaminases in cases of cancer $59.1{pm}8.9$ IU/l and $105.5{pm}26.5$ IU/l when compared to stone cases $56.9{pm}7.9$ IU/l and $84.5{pm}13.5$ IU/l respectively. Conclusions: LFT analysis for pre-operative assessment was a good predictive marker in setting apart bile duct cancer and gall bladder stone.