Transforming growth factor (TGF)-beta1 plays an important role in hepatocarcinogenesis and has been described as a useful tumor marker and one of the poor prognostic indicators in patients with hepatocellular carcinoma (HCC). To investigate the role and cellular localization of TGF-beta1 during multistep hepatocarcinogenesis we performed a quantitative analysis of TGF-beta1 mRNA and immunohistochemical expression of TGF-beta1 and TGF-beta receptor II (TGF-betarII) in female Sprague-Dawley rats. The experimental groups included neoplastic lesions produced by Solt-Farber's protocol, regenerating liver after partial hepatectomy, and normal control. Quantitative change of TGF-beta1 mRNA was analysed by competitive reverse-transcription polymerase chain reaction (RT-PCR). TGF-beta1 protein and TGF-betarII expression were evaluated by immunohistochemical stain. The discrete tumor nodules were detected on 14th day and then increased in number and size. Three HCCs were induced on 8th or 9th month. RT-PCR demonstrated TGF-beta1 mRNA band in all examples of the normal and regenerating liver, nodules and HCCs. Competitive RT-PCR displayed higher TGF-beta1 mRNA in nodules, HCCs and regenerating liver than in normal controls. Hepatocytes from control and regenerating livers showed weak immunoreactivity for TGF-beta1. In contrast, the cytoplasm of hepatocytes of nodules in 7th, 8th and 9th month and HCCs were intensely stained for TGF-beta1. Some sinusoidal cells showed immunoreactivity for TGF-beta1 in all experimental groups. In early phase of carcinogenesis, the cytoplasm of hepatocytes in liver of 12h, 1d and 3d showed transiently increased immunoreactivity for TGF-beta1 and The immunoreactivity decreased thereafter. TGF-beta1 mRNA was also detected in the neoplastic hepatocytes by in-situ hybridization. Although TGF-betarII expression was correlated with TGF-beta1 immunoreactivity during early phase of carcinogenesis, hepatocytes in most nodules in 7th, 8th, 9th month and carcinomas showed decreased or little immunoreactivity for TGF-betarII. Based on the above results, it is concluded that TGF-beta1 expression increases not only in precancerous nodules but also in HCCs and its increase seems to be correlated with decrease or loss of TGF-betarII expression although its mechanism remains unclear. Hepatocytes may be a major cellular source of TGF-beta1 during hepatocarcinogenesis.