Primary cultures of epidermal growth factor (EGF)-stimulated hepatocytes are a valuable tool to study the regulation of hepatocyte proliferation. As progression through the cell cycle is generally associated with a reduction in liver-specific functions, we studied the effects of a proliferative response triggered by EGF on the albumin secretion and urea production, and on cytochrome P450 (CYP) 1A1 and CYP2B1 expression and their corresponding 7-ethoxyresorufin-O-deethylase (EROD) and 7-pentoxyresorufin-O-dealkylase (PROD) activities. It was found that cell cycle entry is associated with decreased albumin secretion and urea production. Furthermore, western blot analysis revealed that in hepatocytes cultured under proliferative conditions, the protein expression of CYP1A1 and CYP2B1 was substantially decreased, as well as the CYP2B-mediated PROD activity. In contrast, EROD activity was not altered. In addition, the expression levels of the liver enriched transcription factors (LETFs) hepatic nuclear factor (HNF) 3beta and HNF4alpha were downregulated under proliferative conditions, whereas the expression of HNF1alpha remained constant. In conclusion, we show that in cultured primary hepatocytes, cell cycle progression significantly modulates albumin secretion, urea production and CYP-mediated biotransformation, probably involving transcriptional regulation by hepatic nuclear factors. Therefore, in order to maintain primary hepatocytes functional in culture, cell cycle inhibition must be achieved.