Several structurally dissimilar hypolipidemic drugs, plasticizers and halogenated hydrocarbons induce peroxisomes in hepatocytes, and cause hepatocellular adenoma and carcinoma in rats and mice. The mechanism by which these agents act is unknown, although recent studies have suggested a link between increased cell proliferation and hepatic cancer caused by peroxisome proliferators. Here, we demonstrate that neutralizing antibodies to tumor necrosis factor alpha (TNF alpha) block increases in protein kinase C and cell proliferation due to [4-chloro-6-(2,3-xylidino)-2-pyrimidinylthio]acetic acid (WY-14,643), a hypolipidemic drug and potent peroxisome proliferator that causes tumors. WY-14,643 moderately elevated the level of TNF alpha mRNA in the liver. TNF alpha was detected immunohistochemically exclusively in Kupffer cells. These results demonstrate that WY-14,643 acts as an indirect mitogen on hepatocytes via TNF alpha. We propose that the Kupffer cell, a major source of TNF alpha in the liver, is involved in the mechanism of the mitogenic effect of WY-14,643.