Intrahepatic transplantation of ovarian fragments in ovariectomized rats results in morphological abnormalities. The liver acini draining blood from ovarian grafts show alterations resembling chemically induced amphophilic hepatocellular preneoplasias. We investigated the long-term development of these estrogen-induced foci of altered hepatocytes (FAH). We divided 451 Lewis rats into one main group (MG) and 11 (7 female, 4 male) control groups and observed them for up to 30 months. MG animals were ovariectomized and received ovarian transplants into the right liver part. Different combinations of castration, transplantation of ovarian or testicular fragments, and administration of antiestrogenic toremifene were used in controls. In the MG, transplants showed signs of gonadotropic stimulation, and estrogen levels were strongly increased in the downstream liver acini. After 6 and 12 months, FAH developed in hepatocytes downstream of the transplants. After 18 months, 27% of the MG animals showed transformation of FAH into hepatocellular adenomas; this figure increased to 42% after 24 months (8/19), significantly outnumbering four spontaneous adenomas that developed between 18 and 30 months in 258 control animals. Hepatocellular carcinoma (HCC) appeared only in the MG. At 24 and 30 months, 18 HCCs developed; thus, 78% of MG animals showed at least one carcinoma. Administration of toremifene in ovariectomized and transplanted animals completely prevented hepatocarcinogenesis. Testicular grafts showed no influence on liver tissue. In conclusion, initially adaptive but preneoplastic alterations in hepatocytes downstream of intrahepatically transplanted ovarian fragments may transform into HCC, indicating a strong hepatocarcinogenic potential of high local levels of endogenous estrogens in the rat liver.