In the Solt-Faber model DENA and 2-Acetaminofluorene (AAF) treatment combined with hepatectomy induces hepatocellular carcinoma in rats. In this model AAF blocks proliferation of hepatocytes, while oval cells restore liver mass. Here we studied the molecular mechanism involved in blocking AAF-dependent cell cycle progression of hepatocytes. AAF inhibits cell proliferation of hepatocytes shown by the lack of Cyclin E expression before the G1/S phase restriction point. Immunfluorescence studies revealed that Cyclin E positive signals were restricted to oval cells, while hepatocytes remained negative. Additionally, AAF treatment induces strong nuclear p53 expression which is associated with increased p21 mRNA levels. Inhibition of active Cyclin/CdK (cyclin dependent kinase) complexes is reflected in AAF-treated animals by decreased RB expression and phosphorylation. The decrease in RB expression and phosphorylation, which is essential in triggering DNA synthesis and Cyclin A expression, leads to a deficiency in transcriptionally active E2F complex formation after hepatectomy. Thus, two molecular explanations are evident to account for AAF-dependent cell cycle progression of hepatocytes in vivo: first, induction of p53 expression which leads to higher p21 mRNA levels, and second, a lack of Cyclin E expression at the G1/S phase restriction point after hepatectomy.