Anti-carcinogenic effect of a serine protease inhibitor, [N, N-dimethylcarbamoylmethyl 4-(4-guanidinobenzoyloxy)-phenylacetate] methanesulfate (FOY-305), was studied in rats with neutral serine protease during hepatocarcinogenesis induced by a single intraperitoneal administration of diethylnitrosamine (DEN) and following feeding of a diet containing 2-N-fluorenylacetamide (FAA) for 32 weeks. Oral administration of FOY-305 significantly suppressed development of -γ-glutamyl transpeptidase (γ-GTP)positive hyperplastic nodules, preneoplastic lesion, at the 8th week of DEN injection, and that of hepatocellular carcinoma (HCC) formation at the 32nd week. Neutral protease activity increased in the preneoplastic and neoplastic livers. The activities in the preneoplastic and tumor-bearing livers were much lower in FOY-305-treated group compared with those in control group. Neutral protease partially purified from neoplastic liver at the 32nd week was inhibited by FOY-305 in vitro. The data suggest that neutral protease plays a crucial role in the process of chemical hepatocarcinogenesis.