Ep‐CAM is a homophilic, Ca²⁺‐independent cell–cell adhesion molecule that is expressed in many human epithelial tissues. Its increased expression is closely associated with active cell proliferation. Furthermore, in epithelial cell types that in adults lack Ep‐CAM (i.e. squamous epithelia), up‐regulation of Ep‐CAM coincides with the early stages of neoplastic change. This study has analysed the expression of Ep‐CAM in liver, in the hepatocytes and cells of the biliary duct system, in relation to proliferative diseases and carcinogenesis. Adult hepatocytes are Ep‐CAM negative, with only bile duct epithelium being positive in the liver tissue. However, in the 8‐week embryonic liver, the majority of hepatocytes express Ep‐CAM. During regeneration and repair of liver tissues associated with focal nodular hyperplasia and (biliary) cirrhosis, activation of Ep‐CAM expression was observed, with high expression levels in so‐called ‘ductular proliferations’—regenerating stem cells. During precursor cell differentiation into mature hepatocytes, several intermediate morphological stages could be observed, all Ep‐CAM positive, including cells morphologically close to mature hepatocytes. Full maturation of the precursor resulted in the disappearance of Ep‐CAM expression. The results suggest that expression of Ep‐CAM is a prerequisite of the proliferative phenotype during differentiation of hepatocyte precursors. In liver neoplasia, Ep‐CAM was expressed in almost all cholangiocarcinomas (10/11), whereas the majority of hepatocellular carcinomas (8/10) were negative, suggesting that malignant proliferation of hepatocellular carcinoma cells is not related to expression of Ep‐CAM and that hepatocellular carcinoma originates from a highly differentiated precursor. The results indicate that Ep‐CAM can be used as an additional immunohistochemical marker to distinguish cholangiocarcinoma from hepatocellular carcinoma due to the differential expression of Ep‐CAM in these tumours. Copyright © 1999 John Wiley & Sons, Ltd.