Liver neoplasms, including hepatocellular and cholangiocellular tumors, commonly occur in winter flounder (Pleuronectes americanus) caught from some chemically contaminated areas such as Boston Harbor. Hydropically vacuolated cells, very often associated with neoplasia in winter flounder liver, appear to represent the first cellular abnormality in animals that later develop frank neoplasms. The proliferative capacity of hydropically vacuolated cells was studied by analyzing both ornithine decarboxylase (ODC) activity and bromodeoxyuridine (BrdU) labeling indices. Liver of winter flounder with vacuolated cellular lesions had ODC activity more than 5- to 12-fold greater than that in liver that lacked such vacuolation, whether caught from Boston Harbor or Georges Bank. Large focal areas of hydropically vacuolated cells dissected from severely affected livers had ODC activity as high or higher than surrounding parenchymal tissue. Significant elevations in hepatic polyamine levels and ratios of putrescine/spermidine were also present in all Boston Harbor animals studied, especially those exhibiting vacuolated cellular lesions, as compared to Georges Bank fish. BrdU labeling techniques indicate that hydropically vacuolated cells, along with perivacuolar small basophilic cells and neoplastic cholangiocytes, appear to have the capacity to synthesize DNA and undergo mitosis. The frequent association of hydropically vacuolated cells with hepatic neoplasia, along with high ODC activity and DNA synthesis capability, suggest that the vacuolated cells and/or perivacuolar basophilic cells may be integral to the development of some neoplastic phenotypes in winter flounder liver.