Transplantation of hepatocytes has been shown to provide metabolic support during liver failure in experimental models. The potential clinical application of hepatocyte transplantation, however, is limited by the need for readily available, well-characterized cells, and a worldwide shortage of donor organs. A clonal hepatocyte cell line that could be grown economically in vitro and would exhibit a differentiated, nontransformed phenotype following transplantation would be an attractive solution to this problem. To test this alternative, primary Lewis rat hepatocytes were conditionally immortalized by retroviral transduction with a thermolabile mutant Simian virus 40 (SV40) large T antigen. The cloned immortalized cells proliferate in culture at 33 degrees C and stop growing at 37 degrees C to 39 degrees C. Transplanted into normal livers, these hepatocytes integrate normally into liver cords. When transplanted into the spleens of portacaval-shunted rats, they protect recipients from hyperammonemia-induced hepatic encephalopathy. The cells engrafted in the spleen exhibit normal morphology, secrete bile, and express albumin messenger RNA. The protection from hyperammonemia is reversed by splenectomy. These studies show that hepatocytes can be conditionally immortalized, expanded in culture, and are capable of providing metabolic support in chronic liver insufficiency. Safeguards that could make these cells clinically useful can be accomplished using currently available technology.