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Transforming growth factor-alpha (TGF alpha), a member of the epidermal growth factor receptor ligand family, has been implicated in the regeneration and transformation of liver. Our recent development of mice that are homozygous for a disrupted TGF alpha gene allowed us to assess the requirement for this growth factor in these complex processes. We report here that although a 70% hepatectomy produced a significant increase in hepatic TGF alpha protein levels in wild-type mice, liver regeneration nevertheless proceeded normally in the absence of the growth factor. The hepatocyte labeling indices determined for homozygous targeted and wild-type mice at 36 and 48 h after hepatectomy were comparable, and the total liver DNA to body weight ratios 8 d after hepatectomy were essentially identical for the two genotypes. These results indicate that TGF alpha, is not necessary for liver regeneration. To test its requirement in liver carcinogenesis, young mice were administered single doses of diethylnitrosamine (DEN) with or without subsequent chronic treatment with the promoting agent phenobarbital (PB). Both wild-type and homozygous mutant male mice treated with DEN or DEN plus PB developed multiple preneoplastic foci or tumors by 9 mo of age with relatively high incidence. However, while five of 88 tumors in wild-type mice attained a diameter greater than 5 mm and were classified as hepatocellular carcinomas, none of 132 tumors in livers of targeted mice reached this size. Furthermore, three of these large wild-type tumors expressed significantly elevated levels of TGF alpha protein compared with normal liver. These results indicate that TGF alpha is not required for early events in chemically induced hepatocarcinogenesis but suggest that it could be important in the progression from small preneoplastic foci to large tumors.