Primary hepatocytes and their cultures are a simple but versatile, well-controlled, and relatively easy to handle in vitro system that is well-accepted for investigating xenobiotic biotransformation, enzyme induction and inhibition, and (biotransformation-mediated) hepatotoxicity. In addition, hepatocyte cultures have proven to be valuable tools in the study of liver physiology, viral hepatitis, and liver regeneration and are proposed as an alternative to orthotopic liver transplantation. It has been observed, however, that a number of liver-specific functions are progressively lost with time when hepatocytes are isolated and cultivated. These phenotypic changes are primarily the result of fundamental changes in gene expression concomitant with a diminished transcription of the relevant liver-specific genes, and can be interpreted as a dedifferentiation of the isolated hepatocytes. Ischemiareperfusion stress induced during the isolation process, disruption of the normal tissue architecture, as well as an adaptation to the in vitro environment are underlying factors and will be extensively discussed. A detailed description of the regulation of the hepatocyte phenotype in vivo in the first section of this review will help to understand the effect of these factors on hepatocyte gene expression. Although different approaches, mainly mimicking the in vivo hepatocyte environment, have been succesfully used to prevent or slow down the dedifferentiation of primary hepatocytes in monolayer culture, the ideal hepatocyte-based culture model, characterized by a long-term expression of hepatocyte-specific functions comparable to the in vivo level, does not exist at the moment. Consequently, alternative strategies should focus on the isolation procedure, during which dedifferentiation is already initiated. In addition, identification of the conditions needed for the full in vitro maturation of hepatic progenitor cells to quiescent, functional hepatocyte-like cells opens promising perspectives.