Trivalent arsenic [As(III)] is a well‐known environmental toxicant that causes a wide range of organ‐specific diseases and cancers. In the human liver, As(III) promotes vascular remodeling, portal fibrosis, and hypertension, but the pathogenesis of these As(III)‐induced vascular changes is unknown. To investigate the hypothesis that As(III) targets the hepatic endothelium to initiate pathogenic change, mice were exposed to 0 or 250 parts per billion (ppb) of As(III) in their drinking water for 5 weeks. Arsenic(III) exposure did not affect the overall health of the animals, the general structure of the liver, or hepatocyte morphology. There was no change in the total tissue arsenic levels, indicating that arsenic does not accumulate in the liver at this level of exposure. However, there was significant vascular remodeling with increased sinusoidal endothelial cell (SEC) capillarization, vascularization of the peribiliary vascular plexus (PBVP), and constriction of hepatic arterioles in As(III)‐exposed mice. In addition to ultrastructural demonstration of SEC defenestration and capillarization, quantitative immunofluorescence analysis revealed increased sinusoidal PECAM‐1 and laminin‐1 protein expression, suggesting gain of adherens junctions and a basement membrane. Conversion of SECs to a capillarized, dedifferentiated endothelium was confirmed at the cellular level with demonstration of increased caveolin‐1 expression and SEC caveolae, as well as increased membrane‐bound Rac1‐GTPase. Conclusion: These data demonstrate that exposure to As(III) causes functional changes in SEC signaling for sinusoidal capillarization that may be initial events in pathogenic changes in the liver. (HEPATOLOGY 2007; 45:205–212.)