Liver gene transcription plays a fundamental role in the hepatic reparative response to injury. However, little is known about the functional relationship of gene expression between diseased and regenerative compartments following a liver injury. To address the hypothesis that the control of gene expression and the cellular proliferative response are specific to diseased and regenerative liver compartments independently, we assessed the expression of liver growth modulators, hepatocyte proliferation, and apoptosis in transgenic livers overexpressing the urokinase-type plasminogen activator (uPA). uPA livers have regenerative nodules that are visually distinct from the surrounding diseased compartments. Northern analyses using RNA from microdissected regenerative and diseased compartments showed that, among the known liver growth factors studied, there was a selective increase in the expression of hepatocyte growth factor (HGF) in diseased compartments above the levels seen in regenerative compartments and in livers of nontransgenic littermates. Despite the high level of HGF mRNA in diseased compartments, hepatocyte proliferation was low. In contrast, in regenerative compartments, where HGF mRNA was low, hepatocyte proliferation was abundant. For growth inhibitors, mRNA expression for transforming growth factor beta1 (TGF-beta1), p53, and activin A was increased in diseased compartments, where hepatocytes displayed apoptosis. These findings define a zone-specific regulation of gene expression in injured livers and point to an important role of the diseased microenvironment in the fate of hepatocytes during the regenerative process.