The elimination of propranolol by perfused livers of rats made cirrhotic by chronic carbon tetrachloride inhalation during phenobarbital treatment has been compared with control animals receiving only phenobarbital. Cirrhosis reduced propranolol clearance at a constant flow of 20 ml/min from 1.43 +/- 0.08 to 1.12 +/- 0.08 ml/min/g liver (P less than 0.025). In addition, an increase in intrahepatic shunting of 15-micron microspheres from 0.41 +/- 0.01 to 9.4 +/- 4.1% was found in cirrhotic livers (P less than 0.05). Finally, in cirrhotic livers, reducing blood flow did not produce the normal rise in hepatic extraction ratio, which actually fell from 0.873 +/- 0.021 at 20 ml/min to 0.836 +/- 0.025 at 15 ml/min and 0.823 +/- 0.026 at 10 ml/min. At each flow the observed extraction was significantly lower than that predicted to result from a reduced enzyme activity alone, consistent with the development of functionally significant intrahepatic shunts. An operational model is proposed that explains impaired drug metabolism in cirrhosis on the basis of the development of intrahepatic shunts which perfuse nonfunctioning tissue, while the remaining blood flow is exposed to a reduced mass of hepatocytes with an apparently normal amount of drug metabolizing enzyme (the intact hepatocyte theory).