The hepatocellular hydration state, i.e. liver cell volume, is a dynamic parameter, which changes within minutes in response to alterations in the environmental or hormonal milieu. These changes in cell hydration act as a signal which modifies metabolism and gene expression due to complex alterations in protein phosphorylation. The role of cellular hydration as an important determinant of liver cell function and gene expression may shed a new light not only on liver physiology but also on liver pathophysiology.