Compensatory hepatic regeneration after partial hepatectomy (PH) is dependent upon the extent of resection. This study analyzes the regulation of the AP-1 transcription factor c-Jun during hepatic regeneration. There is a progressive increase in c-jun mRNA levels after sham operation, one-third PH, and two-thirds PH. A concomitant increase in AP-1 binding activity is also observed. The c-Jun protein is a major constituent of the AP-1 complex in quiescent and early regenerating liver. The activity of c-Jun nuclear kinase (JNK), which phosphorylates the activation domain of the c-Jun protein, is markedly stimulated after one-third PH. JNK1 or an immunologically related kinase is a constituent of this stimulated JNK activity after PH. When primary cultures of adult rat hepatocytes are incubated with epidermal growth factor or transforming growth factor-alpha, AP-1 transcriptional activity is increased and the activation domain of the c-Jun protein is further potentiated. Phosphopeptide mapping of the endogenous c-Jun protein in proliferating cultured hepatocytes demonstrates phosphorylation of the c-Jun activation domain. Combining the results of these in vivo and culture studies, we conclude that the minimal stimulation of one-third PH activates JNK, which phosphorylates the c-Jun activation domain in hepatocytes, resulting in enhanced transcription of AP-1-dependent genes.