We previously showed that hepatic cells proliferate in obstructive jaundice alone without partial hepatectomy and found that external biliary drainage for obstructive jaundice markedly suppresses liver regeneration after partial hepatectomy. In this study, we produced a model system for internal biliary drainage in which bile was drained into the stomach of rat fed a liquid diet. The regeneration capacity of the liver was assessed on the basis of the induction of DNA polymerase-α activity, as well as the mitotic index of hepatic cells. A remarkable difference was observed in the regeneration capacities of cholestatic livers between two groups—one in which jaundice was released by the internal and one by external biliary drainage before hepatectomy. After 5 days of internal biliary drainage, the regeneration capacity remained at a level comparable to that of sham-operated control rats, in sharp contrast to the impaired regeneration after external biliary drainage. These results clearly indicate that internal biliary drainage is preferable for release of biliary obstruction before partial resection of cholestatic liver. (Hepatology 1994;20:1318–1322).