The goal of this study was to investigate the viability and synthetic function of rat hepatocytes cocultured with 3T3-J2 fibroblasts in a small-scale microchannel flat-plate bioreactor with and without an internal membrane oxygenator under flow. Bioreactor channel heights ranged between 85 and 500 μm and medium flow rates ranged between 0.06 and 4.18 mL/min. The results showed that the bioreactor without the oxygenator resulted in significantly decreased viability and function of hepatocytes, whereas hepatocytes in the bioreactor with internal membrane oxygenator were able to maintain their viability and function. The shear stress calculations showed that, at lower wall shear stresses (0.01 to 0.33 dyn/cm2), hepatocyte functions, measured as albumin and urea synthesis rates, were as much as 2.6- and 1.9-fold greater, respectively, than those at higher wall shear stresses (5 to 21 dyn/cm2). Stable albumin and urea synthesis rates for 10 days of perfusion were also demonstrated in the bioreactor with internal membrane oxygenator. These results are relevant in the design of hepatocyte bioreactors and the eventual scaling-up to clinical devices. © 2001 John Wiley & Sons, Inc. Biotechnol Bioeng 73: 379–389, 2001.