The effects, over periods from 3 days to 9 months of administration, of diets containing di-2-ethylhexyl phthalate are very similar to those observed in rats administered diets containing hypolipidemic drugs such as clofibrate. Changes occur in a characteristic order commencing with alterations in the distribution of lipid within the liver, quickly followed by proliferation of hepatic peroxisomes and induction of the specialized P-450 isoenzyme(s) catalyzing omega oxidation of fatty acids. There follows a phase of mild liver damage indicated by induction of glucose-6-phosphatase activity and a loss of glycogen, eventually leading to the formation of enlarged lysosomes through autophagy and the accumulation of lipofuscin. Associated changes are found in the kidney and thyroid. The renal changes are limited to the proximal convoluted tubules and are generally similar to changes found in the liver. The effects on the thyroid are more marked. Although the levels of thyroxine in plasma fail to about half normal values, serum triiodothyronine remains close to normal values while the appearance of the thyroid varies, very marked hyperactivity being noted 7 days after commencement of treatment, this is less marked at 14 days, but even after 9 months treatment there is clear cut evidence for hyperactivity with colloid changes which indicate this has persisted for some time. Straight chain analogs of di-2-ethylhexyl phthalate, di-n-hexyl phthalate and di-n-oxtyl phthalate differ entirely in their short-term effects on the liver and kidney but have similar effects on the thyroid. The short-term in vivo hepatic effects of the three phthalate esters can be reproduced in hepatocytes in tissue culture. All three phthalate esters, as well as clofibrate, have early marked effects on the metabolism of fatty acids in isolated hepatocytes. The nature of these changes is such as to increase storage of lipid in the liver. A hypothesis is presented to explain the progress from these initial metabolic effects to the final formation of liver tumors.