Isolated rat hepatocytes in suspension are in a protein-catabolic state (negative nitrogen balance), as measured by the continuous release of nitrogen in the form of amino acids and urea. The nitrogen loss corresponds to a protein degradation rate of 3-4% per h, while the rate of protein synthesis is negligible. Cells prepared from fasted, fed to regenerating livers are all highly protein-catabolic. The nitrogen balance is unaffected by insulin or amino acids (physiological mixture), and various metabolites and sera have only moderate effects. However, incubation of the cells for 2-4 h in a tissue culture medium (Dulbecco's) reduces the nitrogen loss dramatically, suggesting the formation of an anticatabolic factor under these conditions.