A system for the study of DNA synthesis in isolated nuclei is described for sham and regenerating rat liver. The system has been characterized with respect to nuclear purity, conditions for optimum incorporation of [5-methyl-3H]thymidine triphosphate, time course of incorporation, product analysis by neutral and alkaline sucrose gradients, and the effect of exogenously added DNA. No difference in the basal level of activity was detected between nuclei prepared from normal or regenerating liver when isolated 24 hr after operation. However, exogenous activated DNA preferentially stimulated [5-methyl-3H]thymidine triphosphate incorporation in nuclei from regenerating liver. Activated DNA caused to react with the carcinogen N-acetoxy-2-acetylaminofluorene was a less effective primer-template in this system and decreased in a dose-dependent fashion the incorporation of [5-methyl-3H]thymidine triphosphate to below basal levels in nuclei from both normal and regenerating liver. The carcinogen N-methyl-N'-nitro-N-nitrosoguanidine had no inhibitory effect when assayed in this fashion.