Adult rat parenchymal hepatocytes in primary culture can be induced to enter into DNA synthesis and mitosis. The optimal conditions for hepatocyte replication are low plating density (less than 10,000 cells/sq cm) and 50% serum from two-thirds partially hepatectomized rats (48 hr after hepatectomy). Approximately 80% of the hepatocytes enter the cell cycle, and most of these cells go through mitosis. The replicating hepatocytes remain positive for glucose-6-phosphatase and negative for gamma-glutamyl transpeptidase, and they accumulate fat, in analogy to regenerating liver. Most of the replicating hepatocytes enter into multiple consecutive rounds of DNA synthesis. Dose-response studies between control animal serum and hepatocyte labeling index indicate that in unoperated animals the serum contains substances stimulatory as well as inhibitory for hepatic growth, with the inhibitory effect prevailing at high concentrations. After partial hepatectomy, the inhibitory activity disappears whereas the hepatopoietin activity reaches almost 90% of maximal biological effectiveness at 25% serum concentration.