Male and female Sprague-Dawley rats (70 males and 70 females in the initial group) were fed a diet containing a polychlorinated biphenyl mixture (Aroclor 1260, 100 ppm for 16 months and 50 ppm for an additional 8 months) for 2 years followed by a control diet for 5 months. A control group initially consisted of 63 males and 63 females. Sequential morphologic changes were evaluated throughout the study. In the PCB-exposed group the following hepatocellular lesions developed in sequence: centrolobular cell hypertrophy at 1 month, foci of cell alteration at 3 months, areas at 6 months, neoplastic nodules at 12 months, trabecular carcinoma at 15 months, and adenocarcinoma at 24 months. In addition, simple and cystic cholangioma at 18 and 23 months, respectively, and adenofibrosis at 22 months were present. With the exception of hepatocyte hypertrophy and adenofibrosis, all lesions contained cells that were positive for gamma glutamyl transpeptidase activity. In the PCB-exposed group that was examined after 18 months, hepatocellular neoplasms were present in 95% of the 47 females and in 15% of the 46 males. Distant organ metastases did not occur and the mortality rate was not increased in the PCB exposed group. In 81 control rats examined after the 18th month, only 1 hepatocellular neoplasm (a neoplastic nodule) occurred. PCB- exposed and control rats developed simple cholangioma, cystic cholangioma and adenofibrosis; the incidence of each was greater in the PCB group. Thus, within the Sprague-Dawley rat group exposed to a diet with relatively high concentrations of Aroclor 1260 for 2 years a hepatocarcinogenic effect manifested by formation of slowly growing hepatocellular carcinomas was produced.