The early cellular changes in the Solt-Farber resistant hepatocyte model of carcinogenesis have been studied to clarify the relationship of oval cell proliferation to the development of early hepatocyte nodules. Cellular proliferation, intermediate filament profiles and the expression of specific cytochrome P450 enzymes were examined. At 24 h after partial hepatectomy (PH) many of the bile ductular cells were in S phase, but over the next few days DNA synthesis progressively decreased in the portal bile ducts and was more common in arborizing ductules (oval cells) radiating from the portal areas. These cells strongly expressed cytokeratins 8 and 19 and vimentin, and from 1 week after PH they frequently underwent differentiation either into hepatocytes, expressing cytochrome P450 enzymes, or into intestinal-type cells. Five days after PH, numerous basophilic foci were discernible, and these expanded rapidly. The ductular cells swirled around the foci, but their antigenic profile clearly indicated that these cells were not involved in the development of these early nodules. In normal hepatocytes, cytokeratin 8 immunoreactivity was distinctly membranous in location, and could only be readily detected in periportal hepatocytes. In the basophilic hepatocyte foci, overexpression of cytokeratin 8 was consistently associated with cells organizing into acini, with expression reminiscent of authentic bile ducts, possibly indicating a structure-function relationship. In conclusion, early foci and nodules in this model are derived from resistant hepatocytes and not ductular oval cells, the latter being a facultative multipotential stem cell compartment.