The activity of the cytochrome P-450-associated metabolic pathway in human (HepG2) and rat (H4-II-E) hepatoma cells was examined. The genotoxic activities of cyclophosphamide and its direct acting metabolite, phosphoramide mustard, were studied in the hepatoma cells as cyclophosphamide is known to be metabolized by phenobarbital-inducible cytochrome P-450-associated metabolic activity. HepG2 and H4-II-E demonstrated the capacity to activate cyclophosphamide to forms capable of inducing sister chromatid exchanges in concentration-dependent fashion. Phosphoramide mustard induced a similar pattern of sister chromatid exchanges at concentrations three orders of magnitude lower than cyclophosphamide. The cytochrome P-450-associated enzyme inhibitors, SKF-525A and metyrapone, were found to reduce the level of cyclophosphamide-induced sister chromatid exchanges in HepG2 and H4-II-E, suggesting that cyclophosphamide was activated by this pathway in both hepatoma lines. Direct evidence for the presence of mRNA transcript coding for a phenobarbital-inducible cytochrome P-450 was demonstrated in HepG2 cells by Northern blot analysis. Comparison of genotoxic responses in human and rat hepatoma cells may allow for an evaluation of responses by different species to potentially mutagenic chemicals.