BACKGROUND Complete liver regeneration after partial hepatectomy (PH) in rats treated with the pyrrolizidine alkaloid retrorsine can be accomplished through the activation, expansion, and differentiation of a novel population of small hepatocyte-like progenitor cells (SHPCs). These cells have not been isolated in pure form, established in primary culture, or transplanted into syngeneic rats to examine their differentiation potential. METHODS Primary liver cells enriched for SHPCs were prepared by differential centrifugation of primary liver cell dispersions from retrorsine-exposed rats 6-8 days and 13-15 days after PH. Isolated SHPCs were characterized for cell size, morphology, and expression of cell type-specific markers (including hepatocyte and bile duct-oval cell markers), and established in short-term primary culture. Isolated SHPCs were transplanted into the livers of syngeneic rats to evaluate their ability to engraft and differentiate into mature hepatocytes. RESULTS SHPCs obtained from retrorsine-exposed rats 6-8 days and 13-15 days after PH were small (10-12 microm in diameter), morphologically resembled hepatocytes, and were predominantly H.4 antigen-positive, alpha-fetoprotein-positive, and OV6-negative. SHPCs did not proliferate in culture and could not be passaged, but short-term cultures were established using protein substrates (collagen or laminin) and defined medium containing epidermal growth factor and nicotinamide. After transplantation into the livers of syngeneic hosts, SHPCs insert into hepatic plates and give rise to differentiated hepatocyte progeny. The SHPC-derived hepatocyte progeny express a differentiated phenotype (albumin-positive, transferrin-positive, alpha-fetoprotein-negative) and are able to proliferate in vivo in response to the growth stimulus provided by PH. CONCLUSIONS The results demonstrate that enriched SHPC populations can be isolated from retrorsine-exposed rats and established in short-term culture, and they can engraft and differentiate after transplantation into the livers of syngeneic rats.