Rat primary hepatocytes were cultured under different extracellular matrix configurations and evaluated for the acquisition and maintenance of structural and functional cell polarity. De novo repolarization of the plasma membrane was variable in rate and extent in hepatocyte cultures maintained on a conventional single layer of either gelled or ungelled collagen. However, cultures maintained in a collagen-sandwich configuration initiated uniform formation of a contiguous anastomosing network of bile canaliculi throughout the entire culture. Localization of apical membrane markers demonstrated normal distribution at the canalicular membrane. A marked rearrangement of the intracellular microfilaments to the cell periphery was observed and coincided with the development of the bile canaliculi. Acquisition of normal bile canalicular function and integrity was observed within 3-4 days postoverlay as indicated by the concentration and retention of carboxyfluorescein within the canalicular network. These results demonstrate that cultures of hepatocytes maintained in a sandwich configuration may serve as a more reliable and representative model in which to study the physiology of hepatic function as well as the morphogenesis of polarized membrane domains in vitro.