We have developed a novel hepatocyte loaded hollow fiber bioreactor as a potential bioartificial liver. Freshly harvested rat hepatocytes were entrapped in a three-dimensional gel matrix within hollow fibers in a perfused bioreactor. Gel entrapment allowed cells to be cultured at high density while maintaining tissuespecific function. Hepatocyte function was evaluated in 10 bioreactors, each containing approximately 5 x 107 cells. Oxygen consumption averaged 0.32 pmole/cell/hr, albumin appearance averaged 0.60 pg/cell/hr, and lidocaine clearance (a measure of the P-450 activity) averaged 0.74 pg/cell/hr. Function persisted for the 7 days of the study. Electron microscopy at 7 days showed the distinctive ultrastructure of viable, differentiated hepatocytes: bile canaliculi, intercellular junctions, peroxisomes, abundant mitochondria, and glycogen granules. Maintenance of tissue specific function and ultrastructure suggests that this bioreactor configuration has potential as a device to support patients in liver failure, as well as to study hepatocytes in vitro.