α‐1‐Antitrypsin (α1‐AT) deficiency is the most common cause of metabolic pediatric liver disease. Hepatocellular injury is caused by toxicity of the mutant α‐1‐antitrypsin Z (α1‐ATZ) molecule retained within hepatocytes. In these studies, we used the PiZ transgenic mouse model of α1‐AT deficiency to examine hepatocellular proliferation in response to chronic liver injury resulting from this metabolic disease. The results showed increased hepatocellular proliferation and caspase 9 activation in male PiZ mice compared with female PiZ and wild‐type mice. Hepatic α1‐AT mRNA and protein expression also were increased in male PiZ mice, suggesting that greater hepatocellular proliferation and caspase activation in males results from increased hepatotoxicity associated with greater intracellular α1‐ATZ accumulation. Testosterone treatment of female PiZ mice increased α1‐ATZ expression and hepatocellular proliferation to a level comparable with that in males. In PiZ mice, hepatocytes devoid of intracellular α1‐AT globules had a proliferative advantage compared with globule‐containing hepatocytes. However, this advantage is relative because both globule‐containing and globule‐devoid hepatocytes exhibited comparable proliferation after partial hepatectomy. In conclusion, these data indicate that intracellular retention of mutant α1‐ATZ is associated with a regenerative stimulus leading to increased hepatocellular proliferation, that gender‐specific signals influence the degree of α1‐AT expression and associated hepatic injury, and that hepatocytes devoid of α1‐ATZ have a proliferative advantage over cells that accumulate the mutant protein. This selective proliferation suggests that hepatocellular transplantation may be applicable for treatment of this and other slowly progressive metabolic liver diseases (HEPATOLOGY 2004;39:1048–1055.)