Gallstones are small, pebble-like substances that develop in the gallbladder. The gallbladder is a small, pear-shaped sac located below your liver in the right upper abdomen. Gallstones form when liquid stored in the gallbladder hardens into pieces of stone-like material. The liquid—called bile—helps the body digest fats. Bile is made in the liver, then stored in the gallbladder until the body needs it.
The gallbladder contracts and pushes the bile into a tube—called the common bile duct—that carries it to the small intestine, where it helps with digestion.

FOR MORE DETAILS http://digestive.niddk.nih.gov/ddiseases/pubs/gallstones/