The phthalate ester di(2-ethylhexyl) phthalate is both a peroxisome proliferator and a hepatic carcinogen. Peroxisome proliferators as a class are hepatocarcinogenic in rodent species. However, none of the peroxisome proliferators tested to date including the phthalate esters and related alcohol and acid analogs have demonstrated mutagenic or DNA-damaging activity in the in vitro Salmonella typhimurium/microsomal or the lymphocyte 3H-thymidine assays. A working hypothesis is proposed that peroxisome proliferation itself initiates neoplastic transformation of hepatic parenchymal cells by increasing intracellular rates of DNA-damaging reactive oxygen production. Evidence which supports such a hypothesis includes increased fatty acid beta-oxidation, elevated H2O2 levels, accumulation of peroxidized lipofuscin, disproportionately small increase in catalase, and elevated peroxisomal uricase activity which accompany peroxisome proliferation in hepatocytes. Direct testing of this hypothesis will provide insight into mechanisms of phthalate ester carcinogenicity and cytotoxicity.