Microcystins are naturally occurring hepatotoxins produced by strains of Microcystis aeruginosa. They are involved in promoting primary liver tumours and a previous study showed that they might also be tumour initiators. In this study we demonstrate that microcystin-LR (MCLR) at doses that were not cytotoxic (0.01-1 microg/ml), induced dose and time dependent DNA strand breaks in human hepatoma cell line HepG2. These DNA strand breaks were transient, reaching a maximum level after 4h of exposure and declining with further exposure. In the presence of the DNA repair inhibitors cytosine arabinoside (AraC) and hydroxyurea (HU), together with MCLR, DNA strand breaks accumulated after prolonged exposure. These results suggest that DNA strand breaks are intermediates, produced during the cellular repair of MCLR induced DNA damage. Digestion of DNA with purified, oxidative DNA damage specific enyzmes, endonuclease III (Endo III) and formamidopyrimidine-DNA glycosylase (Fpg) markedly increased DNA strand breaks in MCLR treated cells, providing evidence that a substantial portion of the MCLR induced DNA strand breaks originate from excision of oxidative DNA adducts. A hydroxyl radical scavenger (DMSO) significantly reduced MCLR induced DNA damage. From these results we conclude that MCLR induces formation of reactive oxygen species that cause DNA damage, and that MCLR may act as an initiator of liver cancer.