Hepatocytes were grown in chemically defined hepatocyte growth medium (HGM) containing hepatocyte growth factor (HGF) and epidermal growth factor (EGF) on collagen-coated polystyrene beads in roller bottle cultures, forming clusters of beads, and proliferating hepatocytes and nonparenchymal cells, including fenestrated endothelium-forming vascular structures. Desmin-positive cells surrounded hepatocytes. Collagen types I and III were deposited in a diffuse manner whereas collagen type IV surrounded the clusters of the epithelial cells, forming a basement membrane. When the mixed cell clusters were implanted in Matrigel (Collaborative Research, Bedford, MA), hepatocytes grew in three dimensions, forming plates and ducts. Many single, long plates of hepatocytes were seen, suggesting progressive linear assembly guided by hepatocyte specific structural parameters. HGF, EGF, and transforming growth factor-α (TGF-α) enhance these phenomena. HGF plus EGF elicited maximal response. TGF-β1 suppressed formation of the ducts and plates. Within three months in Matrigel, the cultures established monolayers composed of plates, ducts, and a well-delineated canalicular network. The mixed cultures expressed albumin, A1AT, AFP, transferrin, and CYPIIB1. Following implantation of the cell clusters in Matrigel, there was decreased expression of c-met, urokinase, urokinase receptor, and TGF-β1. Electron microscopy showed differentiated hepatocytes with nearly normal ultrastructure. The proliferating cell nuclear antigen (PCNA) labeling index was high (more than 80%) whereas the Bromo-deoxyaridine labeling index of ongoing DNA synthesis varied from 10% to 15%. These results show that the mixed cultures of proliferating hepatocytes and nonparenchymal cells can reproduce the hallmark structures of hepatic histological architecture while maintaining differentiation and the capacity to proliferate.