Oval cells are facultative liver progenitor cells, which are invoked during chronic liver injury in order to replenish damaged hepatocytes and bile duct cells. Previous studies have observed inflammation and cytokine production in the liver during chronic injury. Further, it has been proposed that inflammatory growth factors may mediate the proliferation of oval cells during disease progression. We have undertaken a detailed examination of inflammation and cytokine production during a time course of liver injury and repair, invoked by feeding mice a choline‐deficient, ethionine‐supplemented (CDE) diet. We show that immediately following initial liver injury, B220‐expressing leucocytes transiently infiltrate the liver. This inflammatory response occurred immediately before oval cell numbers began to expand in the liver, suggesting that the two events may be linked. Two waves of liver cytokine production were observed during the CDE time course. The first occurred shortly following commencement of the diet, suggesting that it may represent a hepatic acute phase response. However, examination of acute phase marker expression in CDE‐fed mice did not support this hypothesis. The second wave of cytokine expression correlated with the expansion of oval cell numbers in the liver, suggesting that these factors may mediate oval cell proliferation. No inflammatory signalling was detected following withdrawal of the injury stimulus. In summary, our results document a close correlation between inflammation, cytokine production and the expansion of oval cells in the liver during experimental chronic injury.