In this critical review, I would like to provide a brief outline of the morphology, biochemical composition, distribution, and functions of peroxisomes. The induction of peroxisome proliferation and peroxisome-associated enzymes in the rodent liver by two classes of chemicals (hypolipidemic drugs and the industrial plasticizers) will be considered. The role of peroxisomes in lipid metabolism will be discussed. Carcinogenicity studies in rats and mice with these peroxisome proliferators will be evaluated critically. Careful consideration will be given to the hypothesis that "potent hepatic peroxisome proliferators as a class are carcinogenic." The possible mechanism(s) by which peroxisome proliferators induce liver tumors will be outlined. Particular attention will be paid to the possible role of peroxisome proliferation-mediated radical toxicity and generation of endogenous initiators of carcinogenesis.