The subcellular distribution of sialidase in rat hepatoma induced by 3'-methyl-4-dimethylaminoazobenzene was studied by using sialyllactose as a substrate in the pH range of 4.0-7.0. As found in rat liver, the activity was recovered largely in the mitochondrial/lysosomal fraction with an optimal pH of 4.5 and in the cytosolic fraction with an optimal pH of 6.0, although hepatoma lysosomal (acidic) sialidase was also distributed in the microsomal fraction. The lysosomal and cytosolic sialidases of the hepatoma were indistinguishable from the corresponding enzymes of liver in chromatographic behavior, kinetics and substrate specificity. The levels of lysosomal and cytosolic sialidase activities in liver and hepatomas were then studied in the pellet and supernatant fractions, respectively, obtained by centrifuging the postnuclear supernatant at 105,000g for 1 hr. All the hepatomas tested, one primary and three transplanted, showed higher lysosomal sialidase and lower cytosolic sialidase activities as compared with liver. Quantitative changes similar to those seen in hepatomas were observed in regenerating liver after partial hepatectomy.