Understanding the immunologic effects of hepatocytes is critical because of the potential to use these cells for bioartificial livers, as a vehicle for gene transfer, and as a means to induce donor-specific immunosuppression in organ transplantation. However, this understanding is complicated by the fact that hepatocytes express membrane-bound and soluble forms of major histocompatibility complex (MHC) class I antigen, each with the potential to induce different immune responses. In the present study we first determined the immunologic effect of normal donor-derived hepatocytes in a rat heart transplant model. We then used ex vivo hepatocyte gene transfer to examine the immunologic effects of different forms of hepatocyte-expressed MHC class I antigen. Results showed that intrasplenic injection of purified, donor-strain–specific hepatocytes into recipients primes alloimmunity, as evidenced by acceleration of heart allograft rejection. Interestingly, injection of autologous hepatocytes transfected ex vivo with DNA encoding only membrane-bound donor MHC class I antigen (RT1.Aa) also accelerated allograft rejection. However, hepatocytes transfected to express only secreted donor MHC antigen prolonged transplant survival. Limiting-dilution analysis of lymphocytes from animals treated with hepatocytes producing only secreted alloantigen showed an antigen-specific reduction in cytotoxic T lymphocyte (CTL) and helper T lymphocyte (HTL) precursors. Further analysis of CTL populations by flow cytometry revealed a relatively high percentage of nonviable cells, implying that soluble antigen promotes allospecific CTL death. In summary, this study suggests that hepatocyte-expressed MHC class I molecules have opposing immunologic effects, with the membrane-bound antigen inducing immunologic sensitization, and the soluble antigen promoting donor-specific immunosuppression.