The role of hepatocellular interaction in the androgen-dependent synthesis of rat alpha 2u-globulin was examined by immunochemical analysis of liver sections. Both after androgen administration to the ovariectomized female and during puberty in the male, only a subpopulation of hepatocytes became competent to synthesize alpha 2u-globulin. These competent hepatocytes first appeared as discontinuous patches along the wall of the central vein. After the formation of a confluent layer around the central vein, cellular competency was seen to propagate toward the periportal direction through the cords of hepatic cells. Although the periportal progression of cellular competency for the synthesis of alpha 2u-globulin appeared to be an all-or-none phenomenon, it did not require cell division. From these results we conclude that certain components of the central vein are necessary for the hormonal induction of alpha 2u-globulin in the rat liver. We also propose that a primary endocrine influence on the hepatic vein results in the production of a secondary paracrine mediator which can trigger the synthesis of alpha 2u-globulin in adjacent hepatocytes. Perivenous to periportal flow of this putative secondary mediator can explain cell recruitment for the synthesis of alpha 2u-globulin along the hepatic cords.