Cirrhotic septa harbor vessels and inflammatory, fibrogenic, and ductular epithelial cells, collectively referred to as the ductular reaction (DR). Lack of the DR in the stromal compartment around hepatocellular carcinoma (HCC) has been documented; however, the relationship of epithelial keratin 19 (K19) structures to progression of intralesional carcinogenesis has not been explored. K19 immunoreactivity in the stromal compartment around 176 nodules in cirrhotic explants was examined. Quantitative differences (P < 0.0001) were manifested in three distinct histologically identifiable patterns: "complex" around cirrhotic nodules (CN), "attenuated" around dysplastic nodules (DN), and "absent" around HCC. Markers of necrosis or apoptosis could not explain the perinodular K19 epithelial loss; however, multicolor immunolabeling for K19, vimentin, E-Cadherin, SNAIL, and fibroblast-specific protein 1 (FSP-1) demonstrated discrepancies in immunophenotype and cytomorphologic features. Variability of cellular features was accompanied by an overall decrease in epithelial markers and significantly increased fractions of SNAIL- and FSP-1-positive cells in the DR around DN when compared with CN (P < 0.0001). Immunolabeling of transforming growth factor-β signaling components (TGFβR1, SMAD3, and pSMAD2/3) demonstrated increased percentages of pSMAD2/3 around DN when compared with CN (P < 0.0001). These findings collectively suggest marked alterations in cellular identity as an underlying mechanism for the reproducible extralesional K19 pattern that parallels progressive stages of intranodular hepatocarcinogenesis. Paracrine signaling is proposed as a link that emphasizes the importance of the epithelial-stromal compartment in malignant progression of HCC in cirrhosis.