Aflatoxin B1 (AFB1) has been classified as a category I human carcinogen, which is responsible for a high incidence of hepatocellular carcinoma. Since exposure to AFB1 can occur through skin contact in addition to ingestion and inhalation, the carcinogenic potential of topically applied AFB1 on mouse skin was investigated. Our results show that single topical application of AFB1 (80 nmol) as a tumor initiator, followed by twice weekly application of 12-tetradecanoyl phorbol myristate acetate (TPA, 4 nmol), resulted in tumor formation after 13 weeks. However, no tumorigenic potential was observed when AFB1 (16 nmol) was used either as a complete carcinogen or as a tumor promoter (4 nmol). Histological analysis of skin showed squamous cell carcinoma in the AFB1/TPA treated group. The application of AFB1 as a complete carcinogen, an initiator or a promoter after 24 weeks demonstrated widespread degenerative and necrotic changes in hepatic tissue as well, suggesting liver to be the target organ following percutaneous absorption. Additionally, twice weekly topical application of AFB1 caused significant induction of cutaneous CYP IA monoxygenases without any effect on hepatic levels while glutathione-S-transferase activity was induced more in the liver than skin. The topical application of AFB1 also resulted in increased hepatic and cutaneous lipid peroxidation with concomitant depletion of glutathione content. It is likely that due to higher induction of hepatic GST activity, products of lipid peroxidation may be detoxified and therefore unable to cause DNA damage making mice resistant to hepatic tumor formation. The overall results indicate a tumor initiating potential of AFB1 in mice and suggest that continued dermal exposure of AFB1, even at low doses, might lead to degenerative changes in hepatocytes.