Infusion of hepatocyte-specific DNA-protein complexes into rats leads to transient recombinant gene expression in liver. The eventual deterioration of gene expression is due in part to instability of the targeted DNA. In a previous report, we noted retention of transgene sequences in liver and persistent recombinant gene expression when the animals were subjected to partial hepatectomy following in vivo gene transfer. In an attempt to define the mechanism(s) responsible for persistent gene expression following partial hepatectomy, we characterized the molecular state of the retained, liver-associated transgenes. Southern blot analysis of DNA from liver tissues harvested various times after in vivo gene transfer and partial hepatectomy (10 min to 11 weeks) demonstrated high levels of transgene DNA (100-10,000 copies/cell). The predominant form of this DNA appeared to be episomal based on analyses of uncut DNA or DNA restricted by an endonuclease with one site in the plasmid. Livers from several animals contained a small proportion of transgene sequences of unknown structure. The existence of episomal DNA in liver was confirmed in experiments in which intact plasmid was rescued from total hepatocyte DNA by transformation of bacteria. Both strands of DNA in the liver-associated plasmid retained a bacterial pattern of methylation suggesting that the plasmid had not replicated in the eukaryotic cell. These results are consistent with the hypothesis that the majority of transgene sequences are retained as stabilized plasmids. The specific form of DNA which is transcriptionally active was not identified in these studies. This represents a new mechanism for retaining foreign DNA in eukaryotic cells in vivo and has implications both for the development of somatic gene therapies and the pathogenesis of viral diseases.