Development of desmin-positive hepatic stellate cells was studied in mice using double immunofluorescent techniques and in vitro cultures with special attention given to their cell lineages. Several studies recently reported on the presence of cells that are immunologically reactive with both antidesmin and anticytokeratin antibodies in young fetal rat livers, and suggested the possibility that these cells give rise to hepatocytes and hepatic stellate cells. At early stages of mouse liver development, stellate cells with desmin-positive filaments were scattered in the liver parenchyma. However, the stellate cells definitely differed from hepatoblasts and hepatocytes in terms of their morphology and expression of desmin and hepatoblast and hepatocyte-specific E-cadherin in the liver. Fetal hepatoblasts and hepatocytes did not react with antidesmin antibodies, nor did desmin-positive stellate cells express E-cadherin in vivo and in vitro. Thus it is likely that desmin-positive stellate cells and hepatoblasts belong to different cell lineages. In the fetal liver, the desmin-positive stellate cells surrounded blood vessels, and extended their processes to haematopoietic cells and megakaryocytes. Many, but not all, hepatoblasts and hepatocytes were observed to be associated with the stellate cells. At fetal stages, cellular processes positive for desmin in the stellate cells were also thick compared with those in the adult liver, in which desmin-positive stellate cells lay in Disse's space and were closely associated with all hepatocytes. These developmental changes in the geography of desmin-positive cells in the liver parenchyma and their morphology may be associated with their maturation and interactions with other cell types.