A recent study from our laboratory has shown that cadmium, a toxic heavy metal, is one of the most effective agents known for inducing hepatocytic transdifferentiation of the rat pancreas. With repeated injections of cadmium, the incidence of rats with pancreatic hepatocytic foci can be as high as 93%. Cadmium is also well known as a very potent inducer of metallothionein, a metal-binding protein that appears to be important in the biologic response to several toxic heavy metals in most tissues, including the pancreas. Therefore, the present study sought to determine if metallothionein was associated with cadmium-induced transdifferentiation of pancreatic cells. Expression of metallothionein was studied immunohistochemically by the peroxidase-antiperoxidase method in tissue sections of the pancreas of rats with pancreatic hepatocytes. High levels of metallothionein were localized primarily within the pancreatic hepatocytes. Surrounding normal pancreatic islet and acinar cells were not immunoreactive. Thus, metallothionein is expressed actively in cells transdifferentiated to hepatocytes by cadmium within the pancreas.