Liver is the main organ of xenobiotic biotransformation. Since biotransformation may generate highly mutagenic active metabolites and reactive oxygen species, liver cells are both the producers and targets for these compounds. Xenobiotics can lead to liver tumour formation via genotoxic or non-genotoxic mechanisms. Non-genotoxic chemicals are often inducers of monooxygenase reactions depending on cytochrome P450 isoforms, active metabolites of which are potencial carcinogens. Moreover, non-genotoxic xenobiotics influence expression of genes responsible for cell proliferation and apoptosis. Increased proliferation may lead to an increased number of cells mutated as a result of genotoxic effects. In animal models of hepatocarcinogenesis at least three steps of tumour development are characterized: initiation, promotion and progression, but it is still unclear what the cellular origin of the liver cancer is. It is likely that either cancer cells originate from differentiated adult hepatocytes or from undifferentiated liver stem cells. Better knowledge about cell changes in neoplastic transformation during hepatocarcinogenesis and gaining control over this process may lead to determination of therapy alternative to cytostatic treatment.