Prostaglandin-E2 increases in liver tissue after partial hepatectomy and stimulates DNA synthesis in primary cultures of hepatocytes. This study evaluated the capacity of Kupffer cells isolated at various intervals after partial hepatectomy to produce prostaglandin E2 in response to bacterial endotoxin. This stimulator of Kupffer cells is a normal endogenous component of portal venous blood. After partial hepatectomy (6 to 48 hr), when hepatic regeneration rates were greatest, regenerating liver Kupffer cells demonstrated a significantly greater capacity to produce prostaglandin E2 in response to bacterial endotoxin than did equal numbers of Kupffer cells from timematched, sham-operated control animals. However, by 12 days after partial hepatectomy, when liver mass had been more than 83% restored, regenerating liver Kupffer cell prostaglandin E2 production had decreased to levels produced by sham KC. We postulate that high levels of Kupffer cell—derived prostaglandin E2 provide a critical paracrine signal fundamental to the initiation and control of growth by neighboring hepatocytes during liver regeneration. (HEPATOLOGY 1991;14:368–372.)