The nonparenchymal cells (NPC) of the liver are primarily located along the sinusoids and therefore are the first cells to encounter blood-borne xenobiotics. To study the possible role of the NPC in the metabolism of xenobiotics, populations of NPC and parenchymal cells (PC) were prepared from rats and various xenobiotic metabolizing enzyme activities investigated. The specific activity of every enzyme studied (ethoxyresorufin deethylase, benzphetamine demethylase, glutathione transferase, UDP glucuronosyltransferase, and microsomal epoxide hydrolase) was 12 to 1000% higher in the PC than in the NPC populations and the patterns of activities between the two populations were remarkably different. The NPC demonstrated a more dramatic induction of enzyme activities in Aroclor 1254-pretreated animals than did the PC. Moreover, despite the generally lower enzyme activities, even after induction, the NPC were damaged by biologically inert xenobiotics which can be metabolized to reactive intermediates. With some compounds, the concentrations required for producing similar damage was much higher in NPC compared with PC, while with other compounds, the NPC were affected by concentrations similar to those required for cytotoxicity in PC. Therefore, the NPC may contribute to the hepatic disposition of xenobiotics and may be adversely affected by reactive intermediates formed. Because of the distinctly different pattern of xenobiotic metabolizing enzymes in the two cell populations, the exact role of the NPC in the control of reactive metabolites and the toxicity produced by them will depend on the structural elements of the xenobiotic in question.