The formation of 7-hydroxymethotrexate and its diglutamate has been established in rat hepatic parenchymal cells in culture. The formation of 7-hydroxymethotrexate increases with the extracellular methotrexate concentration (1-50 microM) and with time over a 24-h period. The majority of the 7-hydroxy derivative is found in the medium after 6- and 24-h incubations at all concentrations examined. At high methotrexate concentration (50 microM) 7% of the total extracellular methotrexate was the 7-hydroxy derivative. 7-Hydroxymethotrexate diglutamate is accumulated within the cell, although longer chain length derivatives are not observed. The inability to form longer chain length polyglutamate derivatives is consistent with a limited capacity of hepatocytes to convert radiolabeled 7-hydroxymethotrexate to the tri- and tetraglutamates although the diglutamate is readily formed. A hepatoma cell line has an extremely limited capacity to form 7-hydroxy derivatives from methotrexate but form measurable amounts of mono-, di-, and triglutamates of 7-hydroxymethotrexate. 7-Hydroxymethotrexate was a good substrate for glutamylation in the hepatoma cells with large amounts of tri- through pentaglutamate derivatives. These studies confirm that 7-hydroxymethotrexate and the diglutamate must be considered when evaluating methotrexate pharmacology and demonstrate that this will be necessary with regard to methotrexate hepatotoxicity.