Fifty-one focal nodular hyperplasia lesions from 36 patients were examined histologically. Serial sections and three-dimensional models were studied in selected cases. Lesions were multiple in 19% of patients. Thirty-four patients were female. One case had 11 focal nodular hyperplasia lesions and 7 hemangiomata in the liver. Three had astrocytoma and one had anomalous pulmonary venous drainage. Morphometric analysis revealed that the lesions were supplied by an anomalous artery larger than expected for the locale in the liver. This artery branched to form a spider-like structure and was usually not accompanied by a portal vein or duct. Each terminal arterial branch supplied a separate nodule 1 mm in diameter; adjacent nodules coalesced to form the focal nodular hyperplasia lesion. The arterial blood appeared to drain directly into the sinusoids of the nodule. We propose that focal nodular hyperplasia is an hyperplastic response of the hepatic parenchyma to a preexisting arterial spider-like malformation. The frequent coexistence of focal nodular hyperplasia with other vascular and neuroendocrine anomalies suggest that the malformations are developmental in origin. The basic requirement for development of hepatic hyperplasia may be greater blood flow to a region compared to the adjacent parenchyma. This requirement appears to be met in the other forms of nodular transformation of the liver, i.e., nodular regenerative hyperplasia and partial nodular transformation.