The expression of a mouse serum albumin (MSA) gene introduced into differentiated and dedifferentiated variant cells of a rat hepatoma line depends on the overall differentiated state of the recipient cell. Thus, the transcription rate of this mouse gene is very high in differentiated cells compared to that in the variant. Furthermore, the activation of its expression is observed during the course of reversion of the variant cell. In well-differentiated hybrids between the variant and cells of the original line, the expression of the MSA gene depends on the phenotype of the transfected parental cell: transcription of this foreign gene is detected only in hybrids in which it was initially integrated into the genome of the differentiated parent. Gene dosage effects are not involved as the copy number of the MSA gene is identical in both types of transfected cells. These results demonstrate that the establishment of the liver phenotype in differentiated hybrids and revertants is due to different mechanisms.