Expression of insulin-like growth factor II in two human hepatocellular carcinoma cell lines and in hepatitis B, cirrhosis and hepatocellular carcinoma in 419 cases were investigated, and its relationship with the expression of hepatitis B virus X gene was studied by means of immunohistochemical and electron microscopic techniques. The results demonstrated that hepatocellular carcinoma cells (SMMC 7721 and QGY 7703) in culture could express insulin-like growth factor II. Expression seemed to be regulated by cell density, which was suggested as the molecular basis of the contact inhibition of cell proliferation. In tissue sections, cells with high expression of insulin-like growth factor II were observed not only in hepatocellular carcinoma (93%) but also in 95% of the pericancerous liver tissues, 72% of cirrhotic livers, 64% of chronic active hepatitis and 37% of chronic persistent hepatitis. In most cases of hepatocellular carcinoma, insulin-like growth factor II was localized in the cytoplasm of the cancer cells. In the benign liver disorders, four types of cells that highly expressed insulin-like growth factor II were observed: (a) a kind of small liver cell we named the small polygonal liver cell; (b) multinuclear giant hepatocytes; (c) hepatocytes in most of hyperplastic and neoplastic nodules, small hepatocyte nodules and some of regenerative nodules; and (d) some proliferating ductular cells. Even more interestingly, insulin-like growth factor II expression was shown to be closely related to the expression of hepatitis B virus X gene product. We suggest that the activation of insulin-like growth factor II gene and its overexpression may be a crucial step in the processes of hepatitis B virus-associated hepatocarcinogenesis and that the X gene product may activate the insulin-like growth factor II gene through a transactivation mechanism. In addition, we studied the characteristics of small polygonal liver cells, and the roles they may play in the regeneration and carcinogenesis of hepatitis B virus-infected liver are discussed.