The customary wave of hepatocyte regeneration which occurs in the rat liver after two-thirds partial hepatectomy can be abolished by oral administration of the carcinogen 2-acetylaminofluorene. Instead, regeneration is achieved through the proliferation and differentiation of potential stem cells (oval cells) which appear to emanate from the portal space. Ultrastructural studies have illustrated the undifferentiated nature of these cells in the first 3 days after resection, but very rapidly they acquire features of small hepatocytes or biliary epithelia. Oval cell progeny can form either cohesive columns of cells within sinusoids which may later differentiate into new hepatic plates, or single cells that can insinuate within existing plates. Using a 35S antisense riboprobe to hepatocyte growth factor (HGF) mRNA, the synthesis of HGF mRNA was observed in sinusoid-lining cells. There were few HGF mRNA-expressing cells in the liver removed at resection, but numbers steadily increased in the remnant over the next 7 days. In particular, an almost nine-fold increase in the density of HGF mRNA-producing cells occurred in the periportal areas, resulting in approximately double the density present within the centrilobular parenchyma. The superabundance of HGF-producing cells in the immediate vicinity of oval cell proliferation and differentiation strongly suggests that this growth factor is involved in all aspects of stem cell behaviour--proliferation, migration, and differentiation, through a paracrine mechanism.