A simple procedure for cryopreservation of rat hepatocytes that allows recovery of viable cells retaining activities of phase I and phase II drug metabolism equivalent to freshly isolated cells is described. The cooling process was initiated 30 min after incubation of freshly isolated hepatocytes at 37 degrees in Krebs-Ringer bicarbonate buffer containing 15 mM glucose to allow for metabolic equilibration. At the end of this period, hepatocyte suspensions were supplemented with 1.7% albumin, 13.3% dimethyl sulfoxide, and the synthetic buffers, 3-[N-morpholino]propanesulfonic acid (MOPS) and N-[2-hydroxyethyl]piperazine-N'-[2-ethanesulfonic acid] (HEPES). Hepatocytes were cooled in a stepwise manner to -196 degrees by holding the cells for 1 hr at -20 degrees and then for 1 hr at -70 degrees before transfer into liquid nitrogen. After thawing and removal of damaged cells by centrifugation in Percoll, the total recovery of viable hepatocytes subjected to freezing was about 42%. The contents of ATP, ADP, and AMP were not altered significantly in cells stored in liquid nitrogen. The metabolic competence of cryopreserved hepatocytes was further confirmed by their ability to synthesize urea from NH4Cl and ornithine at the same high rate that was observed in freshly isolated cells (693 +/- 68 and 740 +/- 68 nmol.mg dry wt-1 x hr-1, respectively). Similarly, cryopreservation did not affect drug-metabolizing systems as indicated by the metabolism of benzo[a]pyrene and 7-ethoxycoumarin, two model substrates. In both freshly isolated and cryopreserved hepatocytes, 7-ethoxycoumarin was O-deethylated to 7-hydroxycoumarin at essentially the same rates (8.66 +/- 0.75 and 8.25 +/- 0.53 nmol.mg dry wt-1.hr-1, respectively) and 7-hydroxycoumarin accumulated in hepatocyte suspensions almost exclusively in the conjugated form. The storage of hepatocytes in liquid nitrogen also did not affect the complex metabolism of benzo[a]pyrene to total oxygenated metabolites and, more importantly, to metabolites conjugated with glutathione, glucuronic acid, and sulfuric acid. Thus, cryopreserved hepatocytes represent a valid and convenient model to study drug biotransformation in intact cells.