We have previously demonstrated in short-term experiments that altered hepatocytes in liver acini draining the blood from intraportally transplanted pancreatic islets in streptozotocin-induced diabetic rats with mild persisting diabetes resemble those in preneoplastic foci of altered hepatocytes. We now present the results of long-term studies (up to 22 months) in this animal model. Glycogen-storing foci (which were the first parenchymal alteration observed some days after transplantation) persisted at least for 6 months, when the first mixed-cell foci and the first hepatocellular adenoma emerged. After 15 to 22 months, 86% of the animals exhibited at least one hepatocellular adenoma and four animals (19%) showed a hepatocellular carcinoma. The transplants were found in a close spatial relationship with the preneoplastic foci and the hepatocellular neoplasms. The mitotic indices, the 5-bromo-2'-desoxyuridine labeling indices and the apoptotic indices showed significant differences between the unaltered liver parenchyma, different types of preneoplastic foci, and hepatocellular neoplasms. The immunohistochemical expression of transforming growth factor-alpha increased during the stepwise development from glycogen-storing liver acini to hepatocellular carcinomas. Hepatocarcinogenesis in this new animal model is probably due to the hormonal and growth-stimulating effects of insulin secreted by the intraportally transplanted islets of Langerhans in diabetic rats.