Male Wistar rats were given, by gastric intubation, small doses of aflatoxin B1 (AFB1): 50 μg twice weekly for 4 weeks and then 75 μg twice weekly for 10 weeks. Their livers were examined histologically and histochemically for γ-glutamyl transpeptidase (γ-GTase), an enzyme present in large amounts in fetal and neonatal livers, but only in minimal amounts in normal adult rat livers. Before 15 weeks no significant hepatic lesions and no changes in γ-GTase activity were detected. From 15 weeks, hyperplastic liver cell foci appeared. Composed of either clear vacuolated, hyperbasophilic, or eosinophilic liver cells, they progressively increased in number and size. Regardless of their morphologic differences, they all showed a strong γ-GTase activity localized on the cell membranes and in the cytoplasm. From 44 weeks, carcinomas developed; they were predominantly well differentiated hepatocellular tumors and, to a lesser extent, hepatocholangiocellular carcinomas. Independent of histologic features, the tumors disclosed a markedly increased γ-GTase activity both on tumor cell membranes and in the cytoplasm. During all preneoplastic and neoplastic stages, no γ-GTase activity was seen in the parenchyma surrounding hyperplastic foci and carcinomas. A strong γ-GTase activity in hyperplastic foci and subsequently in hepatocarcinomas further supported the commonly assumed precancerous nature of the former and illustrated the return of the latter to a more embryonic biochemical state. The fact that the focal reappearance of γ-GTase occurred before the development of true carcinomas and then persisted in the tumor tissue showed a close link between enzyme reappearance and neoplastic transformation but did not clarify whether this was pathogenetic in the neoplastic process.