The activity of N-acetylglucosaminyltransferase III, which adds a "bisecting" GlcNAc in beta 1,4 linkage to the beta-linked Man of the core of Asn-linked oligosaccharides (Narasimhan, S. (1982) J. Biol. Chem. 257, 10235-10242), was determined in hepatic nodules of rats initiated by administration of a single dose of carcinogen 1,2-dimethylhydrazine.2HCl (100 mg/kg, intraperitoneal) 18 h after partial hepatectomy and promoted by feeding a diet supplemented with 1% orotic acid for 32-40 weeks. N-Acetylglucosaminyltransferase III was assayed using glycopeptide GlcNAc beta 1,2Man alpha 1,6(GlcNAc beta 1,2Man alpha 1,3)Man beta 1, 4GlcNAc beta 1,4GlcNAc-Asn as substrate and, as enzyme sources, microsomal membranes of the hepatic nodules, surrounding liver, regenerating liver, and age- and sex-matched control liver. The nodules had significant N-acetylglucosaminyltransferase III activity (0.78-2.18 nmol GlcNAc transferred/h/mg of protein), while the surrounding liver, the regenerating liver (24 h after partial hepatectomy), and the control liver had negligible activity (0.02-0.03 nmol/h/mg of protein). Product isolated from a large scale N-acetylglucosaminyltransferase III incubation with hepatic nodules as enzyme source showed the presence of the bisecting GlcNAc residue by 500 MHz proton NMR spectroscopy. Concomitant with the appearance of N-acetylglucosaminyltransferase III activity in the preneoplastic nodules, the activities of N-acetylglucosaminyltransferase I and II were decreased in these membranes when compared to those from surrounding liver, regenerating liver, and control liver. These results suggest that N-acetylglucosaminyltransferase III is induced at the preneoplastic stage in liver carcinogenesis promoted by orotic acid and are consistent with the reported presence of bisecting GlcNAc residues in the Asn-linked oligosaccharides of rat and human hepatoma gamma-glutamyl transpeptidase and their absence in enzyme from normal liver of rats and humans (Kobata, A., and Yamashita, K. (1984) Pure Appl. Chem. 56, 821-832).