Nodular lesions induced by N-nitrosobis (2-hydroxypropyl) amine (BHP) and phenobarbital (Pb) in F344 rat thyroid were histologically divided into 2 categories, benign lesions and carcinoma. Benign lesions were subclassified into 3 types mainly based on histological characteristics and localization of peroxidase (PO). The type 1 lesion showed localization of PO almost identical with that of the group 1 rat thyroid. Type 2 was characterized by an intense reaction product of PO in the cytoplasm but a weak one on the surface of the microvilli, and type 3 exhibited localization of PO opposite to that of type 2. Carcinoma proliferated in papillary, follicular and poorly differentiated patterns and developed as de novo carcinoma with the highest incidence, although a considerable number of carcinomas coexisted with benign type 3 lesions. A majority of these carcinomas lacked the reaction product for PO. These results suggest that benign nodular lesions, especially types 2 and 3, show hyperactivity of PO synthesis reflecting their response to excessively secreted TSH, whereas carcinoma is autonomous, because of marked inhibition of PO synthesis even in the presence of TSH hypersecretion.