It has been observed that liver regeneration in acute hepatic failure (AHF) is suppressed [Eguchi et al. Hepatology 1996;24(6):1452–9]. The molecular mechanism regulating this inhibition is not known. We previously reported that in AHF rats, hepatocyte proliferation was significantly impaired with elevation in serum IL-6, TGF-β1, and HGF [Kamohara et al. Biochem Biophys Res Commun 2000;273(1):129–35]. Following either 70% partial hepatectomy (PH) or liver injury, quiescent mature hepatocytes are “primed” to re-enter the cell cycle. The process of “priming” appears to be triggered by extracellular cytokines (IL-6 and TNF-⍺) and is characterized by expression of immediate early genes. Under the stimulation of growth factors such as HGF, “primed” hepatocytes exit the G1 phase of the cell cycle. G1-associated cyclins and their inhibitors play a pivotal role in G1/S cell cycle transition. Here, we demonstrate that immediate early gene (i.e. c-myc, c-fos) expression and AP-1 activity are preserved in AHF rat livers despite absence of hepatocyte proliferation. In contrast, p21 mRNA and protein are both over-expressed in AHF livers compared to livers from rats undergoing PH; this elevation leads to inhibition in Cdk2 activity, resulting in G1 cell cycle arrest and inhibition of regeneration.