This study examines factors influencing the level of environmental disclosure in 10K reports. Sample firms consist of Fortune 500 companies identified by the Environmental Protection Agency as Potentially Responsible Parties. The study utilizes a comprehensive environmental disclosure index to measure the extent to which sample firms disclosed environmental liability information required by Generally Accepted Accounting Principles (GAAP). Empirical tests demonstrate that the extent of required environmental disclosure is associated with size, profitability, and industry classification; however, the results regarding regulatory influence are mixed. The study uses data from COMPUSTAT, EDGAR, and the Superfund Public Information System for years 1991-1997. The environmental disclosure index is compiled based on relevant authoritative guidance contained in Regulation S-K, SAB 92, and SFAS 5. Policy implications indicate that the Securities and Exchange Commission must improve monitoring and enforcement efforts designed to promote adequate recognition and disclosure related to environmental liabilities.