The hepatocytes in the mature normal liver are tightly coupled through gap junctions, except during compensatory hyperplasia (regeneration) after partial hepatectomy when the gap junctions become down-regulated. The significance of this down-regulation has been a long-standing enigma. The present study of hepatocytes in primary culture and in the regenerating liver aimed at defining the relationship, if any, between hepatocyte gap junctional communication and proliferation. Gap junctional down-regulation in the regenerating liver appeared to be a specific phenomenon because desmosomes and the surface contact area between neighboring hepatocytes remained constant. All agents and conditions (dexamethasone in vivo; dexamethasone, cyclic adenosine monophosphate, serum, and high cell density in vitro) delaying gap junctional down-regulation also increased the lag before the cells reached competence to enter S phase. This raised the possibility that hepatocyte DNA replication was inhibited through preservation of gap junctions. However, we disproved this assumption by showing that the DNA replication (more specifically the G1/S transition rate constant) was inhibited even in hepatocytes completely devoid of gap junctional communication. The teleological advantage of linking gap junctional down-regulation to hepatocyte G1 progression therefore may not be to trigger DNA replication but to ensure that proliferating hepatocytes and hepatocytes responsible for liver-specific metabolic functions maintain separate pools of metabolites and signaling molecules.