Hepatocyte transplantation is an emerging approach for the treatment of liver diseases. However, broad clinical application of this method has been limited by restricted source of cells and low efficiency of cell integration within the recipient liver. Heparanase cleaves heparan sulfate proteoglycans in the extracellular matrix and basement membrane, activity that affects cellular invasion associated with cancer metastasis and inflammation. This activity has a multifunctional effect on cell-cell interaction, cell adhesion, and angiogenesis. All these factors are important for successful integration of transplanted hepatocytes. Male donor hepatocytes pretreated with heparanase or untreated were transplanted into recipient female rat spleen following partial hepatectomy. Engraftment efficacy was evaluated by PCR for Y chromosome, histology and PCNA, and heparanase immunohistochemistry. In addition, proliferative activity of hepatocytes in vitro was determined by bromodeoxyuridine immunostaining. The number of heparanase-treated cells detected in the recipient liver was significantly increased three- to fivefold within 24-48 h posttransplantation and twofold at 14 days compared with untreated cells. The transplanted hepatocytes treated with heparanase were clearly seen inside portal vein radicles as cell aggregates up to 72 h posttransplantation. The number of portal radicles filled with heparanase-treated hepatocytes was increased compared to control early after transplantation. Heparanase treatment enhanced hepatocyte and sinusoidal endothelial cell proliferation in the liver, and hepatocyte proliferation within the spleen tissue. Preliminary in vitro studies with isolated hepatocytes treated with heparanase showed increased proliferative activity within 24-48 h of cell culture. These results suggest that preincubation of hepatocytes with heparanase increases the presence of hepatocytes within the recipient liver early following cell transplantation and stimulates both hepatocyte and sinusoidal endothelial cell proliferation.