Ethanolamine (Etn) stimulates hepatocyte proliferation in vivo and in vitro; however, the physiological function of Etn in hepatocytes has yet to be elucidated. In the present study, we examined the effect of Etn using a primary culture of rat hepatocytes. The level of membrane phosphatidylethanolamine (PE) significantly decreased when the hepatocytes were cultured without Etn but increased to the level found in the liver when the culture medium was supplemented with 20- 50 microM Etn. Moreover, Etn stimulated DNA synthesis in a dose-dependent manner and had a synergistic effect with epidermal growth factor (EGF). A binding assay and Western blotting showed that the number of EGF receptors was 22- 30% lower in cells grown in the absence of Etn compared to those grown in its presence, but the respective Kd values were almost the same. Furthermore, tyrosine phosphorylation of the EGF receptor was significantly lower in cells grown without Etn. Phosphatidylcholine (PC) synthesis in the liver is unique in that it occurs via stepwise methylation of PE. We found that without Etn supplementation, bezafibrate-induced inhibition of PE methylation increased the level of PE by decreasing its conversion to PC and stimulated DNA synthesis. Moreover, the function of EGF in stimulating DNA synthesis was significantly enhanced under Etn-sufficient conditions. These data suggest that Etn is a nutritional factor required for synthesis of adequate PE, levels of which are important for hepatocyte proliferation.