Hepatocyte transplantation may provide an alternative to orthotopic liver transplantation to treat liver failure. However, suitable systems to transplant hepatocytes and promote long-term engraftment must be developed. In this study, highly porous, biodegradable sponges were fabricated from poly (L-lactic acid) (PLA), and poly (DL-lacticco-glycolic acid) (PLGA), and utilized to transplant hepatocytes into the mesentery of three groups of Lewis rats. The portal vein was shunted to the inferior vena cava in one group of rats (PCS). The second group of animals received a PCS and a 70% hepatectomy on the day of sponge-hepatocyte implantation (PCS + HEP), and the control group (CON) received no surgical stimulation. The sponges were vascularized by ingrowth of fibrovascular tissue over the first 7 days in vivo. Approximately 95-99% of the implanted hepatocytes (determined utilizing computer-assisted image analysis) died in all three experimental groups during this time. The number of engrafted hepatocytes in the CON group further decreased over the next 7 days to 1.3 +/- 1.1% of the original cell number. However, the number of engrafted hepatocytes in the PCS and PCS + HEP increased over this time to 6 +/- 1% and 5 +/- 2%, respectively. The number of engrafted hepatocytes in the PCS group continued to increase over the next 2.5 months to a value of 26 +/- 12% of the initial cell number, and a large number of engrafted hepatocytes was still present at 6 months. These results indicate that stable new tissues can be engineered by transplanting hepatocytes on biodegradable sponges into heterotopic locations if appropriate stimulation is provided.