BACKGROUND & AIMS: The transcription factor nuclear factor kappa B (NF-kappa B) is activated by the I kappa B kinase complex. The regulatory subunit of this complex, NF-kappa B essential modifier (NEMO or IKBKG), is a tumor suppressor. Hepatocyte-specific deletion of NEMO induces chronic liver inflammation that leads to apoptosis, oxidative stress, development of nonalcoholic steatohepatitis, and hepatocarcinogenesis. METHODS: We performed partial hepatectomies in mice with hepatocyte-specific disruption of NEMO (Nemo(Delta hepa)). Some mice were fed a diet that contained the antioxidant butylated hydroxyanisole (BHA), and others were given daily intraperitoneal injections of the oxidant phenetyl isothiocyanate (PEITC). RESULTS: Nemo(Delta hepa) mice had impaired liver regeneration after partial hepatectomy and 50% mortality, indicating that NEMO is required for the regenerative response. Liver cells of the mice had a strong oxidative stress response; these cells down-regulated the NF-kappa B-dependent antioxidant response and reduced levels of proteins that repair DNA double-strand breaks. However, the impairments to hepatocyte proliferation were compensated by a response of oval cells in Nemo(Delta hepa) mice. Oval cells expressed low levels of albumin and thereby expressed normal levels of NEMO. Repopulation of the liver with oval cells that expressed NEMO reversed liver damage in Nemo(Delta hepa) mice. Interestingly, these mice still developed hepatocellular carcinomas 6 months after partial hepatectomy, whereas Nemo(Delta hepa) mice fed the BHA diet were protected from carcinogenesis. CONCLUSIONS: In livers of mice, expression of NEMO and activation of NF-kappa B are required for hepatocyte proliferation and liver regeneration. These mechanisms require control of oxidative stress and DNA integrity.