Allelic imbalance of the insulin-like growth factor II (IGF II) gene expression is often seen in hepatocellular carcinoma (HCC). To investigate the role of allelic imbalance in hepatocarcinogenesis, we have studied allelic expression status of the IGF II gene in dysplastic nodules, which are precancerous lesions of HCC, as well as in HCCs of different histological grade, and the influence of the allelic imbalance on IGF II gene expression has also been examined. Allelic imbalance was observed in 3 of 7 dysplastic nodules, in 7 of 9 well-differentiated HCCs, and in 8 of 9 moderately differentiated HCCs. IGF II gene expression level, which was studied by a semiquantitative reverse-transcriptase polymerase chain reaction (RT-PCR), was significantly higher (3.6-fold) in the dysplastic nodules than the control livers, but a significant increase in the IGF II gene expression was not observed in well- and moderately differentiated HCCs as compared with the control livers. These results demonstrate that the allelic imbalance of the IGF II gene expression is seen in the early stage (precancerous lesions) of hepatocarcinogenesis. Association of the allelic imbalance with an increased expression of the IGF II gene in the precancerous lesions might suggest a possible involvement of an IGF II autocrine loop in the pathogenesis of these lesions.