The molecular and cellular mechanisms of activation of fat-storing cells (Ito cells or parasinusoidal lipocytes), a prerequisite of the fibrogenic response of injured liver, were studied by analysis in vitro of some aspects of the intercellular communication between parenchymal liver cells and fat-storing cells. Conditioned medium harvested from early serum-free monolayer cultures of hepatocytes isolated from normal rat liver stimulated strongly, reproducibly and dose-dependently the proliferation of nonconfluent fat-storing cells maintained under serum-reduced conditions. During exposure of fat-storing cells for 48 hr to the conditioned medium, the incorporation of [3H]thymidine into DNA was stimulated four to six times over control values, the DNA content per culture well was elevated by 40% above control values and the immunocytochemical detection of bromodeoxyuridine-labeled cell nuclei was increased from 13% stained nuclei in controls to 70% stained nuclei in treated fat-storing cells. The mitogenic effects of hepatocyte-conditioned medium were similar to or even higher than those of 10% fetal calf serum. No mitoinhibitory activity could be detected in the hepatocyte-conditioned medium when arginase, as a potential inhibitor, was excluded. Rat skin fibroblasts could not be stimulated under conditions where the proliferation activity of fat-storing cells was greatly enhanced. The occurrence of the mitogenic activity in the medium is not dependent on de novo synthesis or secretion because the media of hepatocytes cultured under anoxic conditions in the presence of cycloheximide, brefeldin A or ethylenediaminetetraacetate were highly active in promoting fat-storing cell proliferation, although hepatocyte viability was greatly reduced under some of these conditions. A significant positive correlation (r = 0.95, p < 0.01) was found between lactate dehydrogenase activity and the mitogenic potency of the conditioned medium. The proliferation factor for fat-storing cells could also be demonstrated in the lysate of freshly isolated hepatocytes from normal liver. The stimulatory activity in the medium was partially enriched by a combination of gel permeation and anion exchange fast protein liquid chromatography and characterized as a protein with an apparent molecular weight of about 60 kD that is heat and pH sensitive but insensitive to reducing agents. It does not bind to immobilized heparin; nor does soluble heparin or proteinase inhibitor affect the mitogenic activity of the factor.(ABSTRACT TRUNCATED AT 400 WORDS)