Gray stools, pale stools, putty or clay colored stools may be seen in hepatitis, gallbladder disorders, or malabsorption conditions. Bile salts in the stool excreted by the liver give it a normal brown color. Obstruction to bile flow out of the liver (you may see the word "cholestasis"), or liver infections like viral hepatitis (A, B, C, etc.), may produce clay colored stools. Possible causes for clay colored stool result from problems in the biliary system (the drainage system of the gallbladder, liver, and pancreas): Malabsorption problems can cause undigested fat in the stool (steatorrhea) which is characterized by foul smelling, light yellow to gray, greasy or frothy stools. This may also be caused by low bile output.