Determining what factors are responsible for initiating regeneration following partial hepatectomy or toxic damage, and how the liver maintains differentiated functions while the hepatocytes are undergoing cellular proliferation are central issues in understanding the molecular bases of liver regeneration. Examination of the transcriptional milieu in the regenerating liver provides clues to the answers to these questions. Growth factor-generated intracellular signals that trigger liver regeneration result in activation via posttranslational modifications of latent, normally inactive transcription factors that preexist in the liver. Two transcription factors that are activated by this mechanism include posthepatectomy factor/nuclear factor-kappa B) and Stat3. Because cytokines such as tumor necrosis factor-alpha (TNF-alpha), interleukin-l (IL-1), and IL-6 can induce these factors in the liver, the finding of activated Stat3 and PHF/NF-kappa B suggests that these cytokines may play a role in some aspects of growth regulation during liver regeneration. Rapidly induced transcription factors, Stat3, PHF/NF-kappa B, and others are responsible for activation of the primary growth response or immediate-early genes, which play a role in regulating later phases of cell growth in regenerating liver and other mitogen-activated cells. Immediate-early genes encode many members of diverse transcription factor families including the Jun-Fos-LRF-1, nuclear receptor, and myc families to name a few. In this way a transcriptional cascade is established during the G1 phase of liver regeneration. Coexisting with these induced factors are liver-specific transcription factors such as the CAAT enhancer binding proteins and hepatocyte nuclear factors, which may interact with growth-induced factors to help the liver maintain metabolic homeostasis during regeneration. As a result the liver is able to accomplish the goals of reestablishing its mass while it maintains its functional capacity during regeneration.