The shortage of organ donors has impeded the development of human hepatocyte transplantation. Immortalized hepatocytes could provide an unlimited supply of transplantable cells. To determine whether immortalized hepatocytes could provide global metabolic support in end-stage liver disease, 35 immortalized rat hepatocyte clones were developed by transduction with the gene encoding the simian virus 40 T antigen (SV40Tag). The SV40Tag sequence and a suicide gene, herpes simplex virus thymidine kinase (HSV-tk), were flanked by loxP sequences so that they could be excised by Cre/lox recombination. When transplanted into the spleens of portacaval-shunted rats, 3 of the 35 immortalized hepatocyte clones prevented the development of hyperammonemia-induced hepatic encephalopathy. The protection was reversed by treatment with ganciclovir, which kills HSV-tk-expressing cells. Transplantation of alginate-encapsulated, immortalized hepatocytes into the spleens of cirrhotic rats resulted in significant improvement in prothrombin time, serum albumin and bilirubin levels, hepatic encephalopathy score, and duration of survival. The metabolic support provided by the immortalized cells equaled that observed after transplantation of primary rat hepatocytes. In conclusion, immortalized hepatocytes can function as well as primary hepatocytes following transplantation and can be engineered to contain safeguards that could make them clinically useful. Further investigation is warranted regarding the mechanisms of loss of mass or function of the transplanted hepatocytes over time and how the relatively few engrafted hepatocytes can ameliorate liver decompensation in cirrhosis.