Phosphatidylethanolamine N-methyltransferase (PEMT) is a liver-specific enzyme that converts phosphatidylethanolamine into phosphatidylcholine. At least two forms of PEMT are present in hepatocytes. However, PEMT activity is negligible in two hepatoma cell lines. Previous studies have indicated an inverse relationship between the expression of one form, PEMT2, and the rate of liver growth, suggesting that this enzyme might be involved in inhibition of hepatocyte proliferation. We have now investigated the expression of PEMT2 at various stages of hepatocarcinogenesis induced by chemical carcinogens. Expression of PEMT2 protein was decreased in liver samples that contained the first detectable proliferative lesions. At later stages of carcinogenesis, PEMT2 expression was obliterated. PEMT activity decreased, the levels of PEMT2 mRNA decreased and there was an increase in the activity of CTP:phosphocholine cytidylyltransferase, a key regulatory enzyme in the CDP-choline pathway of phosphatidylcholine biosynthesis. Southern blot analyses of restriction fragments of DNA showed no changes in the PEMT gene in hepatocarcinoma compared with normal liver. A role for PEMT2 in the control of hepatocyte proliferation remains an intriguing possibility.