After two-thirds hepatectomy, normally quiescent liver cells are stimulated to reenter the cell cycle and proliferate to restore the original liver mass. The level of bZIP transcription factor CCAAT enhancer-binding protein beta (C/EBPbeta) increases in the liver during the period of cell proliferation. The significance of this change in C/EBP expression is not understood. To determine the role of C/EBPbeta in the regenerating liver, we examined the regenerative response after partial hepatectomy in mice that contain a targeted disruption of the C/EBPbeta gene. Posthepatectomy, hepatocyte DNA synthesis was decreased to 25% of normal in C/EBPbeta -/- mice. The reduced regenerative response was associated with a prolonged period of hypoglycemia that was independent of expression of C/EBPalpha protein and gluconeogenic genes. C/EBPbeta -/- livers showed reduced expression of immediate-early growth-control genes including the Egr-1 transcription factor, mitogen-activated protein kinase protein tyrosine phosphatase (MKP-1), and HRS, a delayed-early gene that encodes an mRNA splicing protein. Cyclin B and E gene expression were dramatically reduced in C/EBPbeta -/- livers whereas cyclin D1 expression was normal. The abnormalities in immediate-early gene expression in C/EBPbeta -/- livers were distinct from those seen in IL-6 -/- livers. These data link C/EBPbeta to the activation of metabolic and growth response pathways in the regenerating liver and demonstrate that C/EBPbeta is required for a normal proliferative response.