Tissue inhibitors of metalloproteinases (TIMP) block proteolytic degradation of extracellular matrix and consequently impede tumor invasion and metastasis. In addition, we have previously reported that hepatic TIMP-1 modulation alters the susceptibility of the liver to oncogene (simian virus 40 T-antigen; TAg)-induced tumorigenesis in a double-transgenic mouse model. To identify the cellular processes by which TIMP-1 inhibits hepatocarcinogenesis, we examined the effects of TIMP-1 on four specific events that are important during tumorigenesis: hepatocellular proliferation, apoptosis, the stromal characteristics of the liver, and tumor vascularization. Transgenic mice with elevated or reduced hepatic TIMP-1 expression were bred independently with TAg transgenics. Liver tissue from littermates were analyzed by in situ hybridization with TIMP-1 cDNA probes; gelatin enzymography; immunohistochemistry for proliferating cell nuclear antigen, von Willebrand factor, and collagen type IV; reticulin histochemistry; and collagens type III and IV, laminin, fibronectin, and CD31 immunoblotting. We demonstrate that TIMP-1 overexpression significantly inhibited the proliferation of hepatocytes in TAg mice but did not affect their apoptotic index, the hepatic parenchymal architecture, or extracellular matrix composition, including collagens type III and IV, laminin, and fibronectin. Moreover, the hepatocellular carcinomas formed in TIMP-1-overexpressing mice had significantly reduced tumor vascularization; conversely, tumor vascularization was significantly increased in TIMP-1-reduced livers. These data indicate that TIMP-1 inhibits TAg-induced hepatocarcinogenesis by altering hepatocellular proliferation and tumor vascularization, without any effect on hepatocyte apoptosis and stromal composition. To our knowledge, this is the first in vivo demonstration that genetic modulation of TIMP-1 inhibits cellular proliferation and angiogenesis during hepatocarcinogenesis. This potentially extends the use of matrix metalloproteinase inhibitors in cancer beyond control of invasion and metastasis.