Lipid-lowering fibrate drugs function as agonists for the nuclear receptor peroxisome proliferator-activated receptor α (PPARα). Sustained activation of PPARα leads to the development of liver tumors in rats and mice. However, humans appear to be resistant to the induction of peroxisome proliferation and the development of liver cancer by fibrate drugs. The molecular basis of this species difference is not known. To examine the mechanism determining species differences in peroxisome proliferator response between mice and humans, a PPARα-humanized mouse line was generated in which the human PPARα was expressed in liver under control of the tetracycline responsive regulatory system. The PPARα-humanized and wild-type mice responded to treatment with the potent PPARα ligand Wy-14643 as revealed by induction of genes encoding peroxisomal and mitochondrial fatty acid metabolizing enzymes and resultant decrease of serum triglycerides. However, surprisingly, only the wild-type mice and not the PPARα-humanized mice exhibited hepatocellular proliferation as revealed by elevation of cell cycle control genes, increased incorporation of 5-bromo-2′-deoxyuridine into hepatocyte nuclei, and hepatomegaly. These studies establish that following ligand activation, the PPARα-mediated pathways controlling lipid metabolism are independent from those controlling the cell proliferation pathways. These findings also suggest that structural differences between human and mouse PPARα are responsible for the differential susceptibility to the development of hepatocarcinomas observed after treatment with fibrates. The PPARα-humanized mice should serve as models for use in drug development and human risk assessment and to determine the mechanism of hepatocarcinogenesis of peroxisome proliferators.