A massive accumulation of mononuclear phagocytes in the rat liver was found after the injection of glucan, a beta-1,3-polyglucose. Portal vessels and central veins contained large numbers of rounded and elongated cells which were adherent to the endothelium. By scanning electron microscopy most of these cells exhibited prominent lemellopodia, raised ridge-like profiles and blebs, the typical features of mononuclear phagocytes. Peroxidase cytochemistry revealed that whereas most cells in portal vessels were monocytes with peroxidase positive and negative granules, the majority of cells in central veins were macrophages exhibiting peroxidase activity in nuclear envelope (NE) and endoplasmic reticulum (ER). In sinusoids monocytes and macrophages were seen side by side. The major finding of the present study was that some cells, adherent to the endothelium or portal vessels or to the lining of sinusoids, exhibited a peroxidase pattern intermediate between monocytes and Kupffer cells, i.e. strong peroxidase activity in cytoplasmic granules, as well as a weak to moderately positive peroxidase reaction in NE and ER. These intermediate cells also contained peroxidase-negative granules with halo, which are usually seen in monocytes. Furthermore, examination of serial ultrathin sections of typical Kupffer cells revealed numerous peroxidase-positive granules and peroxidase-negative granules with halo in their cytoplasm. Finally, dividing Kupffer cells with positive peroxidase reaction in ER were found. These in vivo observations provide ultrastructural and cytochemical evidence in support of the concept of derivation of Kupffer cells from monocytes, demonstrating in addition that Kupffer cells are capable of self-replication in situ.