Fischer 344 rats and B6C3F1 mice of both sexes were exposed to 400 ppm perchloroethylene (PER) by inhalation, 6 hr/day for 14, 21, or 28 days or to 200 ppm for 28 days. Increased numbers of peroxisomes were seen under the electron microscope and increased peroxisomal cyanide-insensitive palmitoyl CoA oxidation was measured (3.6-fold increase in males and 2.1-fold increase in females) in the livers of mice exposed to PER. Hepatic catalase was not increased. Peroxisome proliferation was not observed in rat liver or in the kidneys of either species. Trichloracetic acid (TCA), a known carcinogen and hepatic peroxisome proliferating agent, was found to be a major metabolite of PER. Blood levels of this metabolite measured in mice and rats during and for 48 hr after a single 6-hr exposure to 400 ppm PER showed that peak blood levels in mice were 13 times higher than those seen in rats. Comparison of areas under the curves over the time course of the experiment showed that mice were exposed to 6.7 times more TCA than rats. The difference in metabolism of PER to TCA in mice and rats leads to the species difference in hepatic peroxisome proliferation which is believed to be the basis of the species difference in hepatocarcinogenicity. Peroxisome proliferation does not appear to play a role in the apparent carcinogenicity of PER in the rat kidney.