Hepatoblastoma is the most common malignant pediatric liver tumor. The molecular mechanisms involved in the pathogenesis of hepatoblastoma are unknown. Cell lines can be valuable tools in the study of tumor biology, but only few hepatoblastoma cell lines have been established. We explanted tumor tissue from human hepatoblastomas to generate cell lines. A continuous cell line (HepT1) was established from a human hepatoblastoma with predominant embryonal differentiation. The HepT1 cell line was characterized by immunohistochemistry, electron microscopy, cytogenetics, and molecular genetic analysis. In addition, the cultured cells were xenografted into nude mice and the resulting tumors compared with the original tumor. The cells grew in epithelial clusters, and expressed cytokeratins and alpha-fetoprotein. Injection of HepT1 cells into nude mice gave rise to serially transplantable subcutaneous tumors. The cell line as well as the xenotransplants displayed the phenotypic and genotypic characteristics of the primary tumor. Ultrastructural analysis demonstrated desmosomal junctions and the formation of bile canaliculi. Cytogenetic analysis showed a near tetraploid karyotype with structural and numerical aberrations of chromosomes 1p, 6, 9, 11q, 13q, 15p, and 20 and both single and double minute chromosomes. In PCR-based microsatellite analysis of chromosome arm 11p, a loss of heterozygosity at all informative loci including the WT-1 and IGF2 genes was detected. Intratumoral erythropoiesis, a characteristic feature of hepatoblastomas, was present in the primary tumor as well as in HepT1 xenotransplants. We therefore studied the expression of erythropoietic cytokines in these cells and found both erythropoietin and stem cell factor. The HepT1 cell line displays characteristic cellular and molecular features of hepatoblastoma and we believe it will be a valuable tool for studies on the biology and pathogenesis of hepatoblastoma as well as on the differentiation of hepatocyte progenitor cells.