Suspensions of freshly isolated hepatocytes were prepared by collagenase perfusion of livers of adult Fischer 344 female rats. The cells were injected into the dorsal fascia of 2/3 partially hepatectomized syngeneic hosts (10(6) cells per injection site) and were monitored from 3 days to 3 months after injection. Brown nodules developed at the transplantation site. Histologic examination of the nodules revealed that the hepatocytes were arranged in cords and clusters surrounded by fibrovascular connective tissue. Bile ductules were also seen. Hepatocytes were positive for glucose-6-phosphatase. Staining for gamma-glutamyltranspeptidase showed that the parenchymal hepatocytes were mostly (approximately 95%) negative, whereas bile ductules were positive. These histochemical findings were seen in hepatocytes up to 3 months after transplantation and did not vary with the age of the transplants. Electron-microscopic examination of the transplanted nodules demonstrated that the cells maintained the characteristics of hepatocellular cytoplasmic structure. The relationship between the bile canaliculi and the stromal vessels was found to be similar to the bile canaliculi and hepatic sinusoid polarity seen in the normal liver. Autoradiographic analysis showed that a fraction of the transplanted cells was active in DNA synthesis. This system may become a tool in the study of survival and neoplastic transformation of hepatocytes as a result of exposure to X-irradiation and chemical carcinogens.