Hepatocytes are extensively used in studies of gene regulation but cannot be maintained in long-term culture as replicating, differentiated cells while remaining nontumorigenic. We have derived two hepatocyte lines from livers of transgenic mice overexpressing transforming growth factor alpha, a potent hepatocyte mitogen, which overcome these limitations. The transgenic hepatocytes were maintained for > or = 2 months in serum-supplemented primary culture and gave rise to cell lines, of which two (AML12 and AML14) have been cultured for > 1.5 years (> 80 passages). Both lines have typical hepatocyte features such as peroxisomes and bile canalicular-like structures, do not grow in soft agar, and are nontumorigenic in nude mice. Like normal hepatocytes, AML cells express high levels of mRNA for serum (albumin, alpha 1-antitrypsin, and transferrin) and gap junction (connexins 26 and 32) proteins, secrete albumin, and contain solely isozyme 5 of lactate dehydrogenase. After extensive passaging, AML12 cells continue to strongly coexpress hepatocyte connexin mRNAs but do not display nonparenchymal cell markers. Although mRNA levels for some serum proteins progressively fall, high expression in late AML12 cultures may be regained by passage in serum-free medium. The AML14 line loses expression of both differentiated markers and transgene mRNA with extended passaging, and hepatocytic traits are only partially restored by passage in serum-free medium. These differentiated, nontumorigenic cell lines should serve as models in which to study hepatocyte growth and differentiation.