A morphological, cytophotometrical and autoradiographical study was carried out on the early liver cell lesions present after one month of thioacetamide (TAA) exposure. We wanted to determine the extent of cell damage in the hepatocytes in relation to the later occurring cholangiocarcinoma. Cytoplasmic and nuclear alterations were present in the hepatocytes. They were mainly due to the toxic influence of the metabolites of TAA. No Feulgen-DNA changes have been observed in the hepatocytes in any of the studied zones. The increased TdR H3+ uptake and mitotic activity in the periportal and midzonal areas represented regenerative activity. In addition to these hepatocytic changes, the centrolobular area was infiltrated by oval cells. These cells appeared at first singly, later on they formed clusters. The electron microscopy of these cells revealed phenotypic characteristics, which were different from the hepatocytes. When separately, these cells resembled undifferentiated cells with cytoplasmic extensions and absent basement membrane. When arranged in clusters, a definite canalicular arrangement was present with characteristics of bile canalicular cells with microvillous extensions at the apical border of the cytoplasm and the presence of a basement membrane. A transition from the first oval cell type to the second oval cell type was suggested. This transition might represent a differentiation process of cells, which are regarded as the target cell and the precursor cell in the development of the cholangiocarcinoma. This is the first study reporting oval cell proliferation in the centrolobular area in a multistep model of livercarcinogenesis in rats.