With a view toward furthering the development of artificial liver systems, we have been culturing hepatocytes in vitro. The object of this research was to investigate the ideal conditions of oxygen tension for the efficient functioning of hepatocytes. Viable hepatocytes isolated from rat livers were cultured under five different oxygen tensions: 5, 10, 20, 50 and 90% O2. DNA contents, gluconeogenesis, urea synthesis, adenosine triphosphate (ATP) levels, and lipid peroxidation of hepatocytes were evaluated. Under the 5% oxygen conditions, the function of hepatocytes was very inferior and was accompanied by a low ATP level. However, hepatocytes cultured under 90% oxygen tension functioned less effectively than the control (20% O2) with elevated lipid peroxidation. The data in this study suggest that the optimum oxygen condition for cultured hepatocytes is 10 approximately 50%, and that especially under conditions of 20% oxygen tension, i.e., that of the ordinary atmosphere, hepatocytes can function most effectively.