The cellular, biochemical, and genetic changes that occur in the liver of rats exposed to chemical hepatocarcinogens are reviewed. Multiple new cell types appear in the liver of carcinogen-treated rats including foci, nodules, ducts, oval cells, and atypical hyperplastic areas. The application of phenotypic markers for these cell types suggests that hepatocellular carcinomas may arise from more than one cell type, including a putative liver stem cell that proliferates following carcinogen exposure. Study of DNA, RNA, and proteins produced by hepatocellular carcinomas and putative premalignant cells has so far failed to identify a gene or gene product clearly associated with the malignant or premalignant phenotype. Understanding the cellular lineage from normal cell through putative premalignant cell to cancer is critical to understanding the process of carcinogenesis. Application of new immunological (monoclonal antibody, transplantation) and molecular biological (gene cloning, oncogene identification) approaches to this problem holds promise that the process of hepatocarcinogenesis will be better known in the near future.