Recent studies suggest that rodent hepatocytes may be derived from hematopoietic stem cells. In the current study, the potential hematopoietic origin of hepatocytes was addressed using xenogeneic transplantation of human cord blood cells. CD34(+) or CD45(+) human cord blood cells were transplanted into "conditioned" newborn NOD/SCID/beta2-microglobulin(null) mice. At 4 to 5 months post-transplantation, livers of the recipient mice were cryosectioned and examined for evidence of human hepatocyte engraftment using RT-PCR to detect human albumin mRNA, immunohistochemistry to detect human hepatocytic proteins, and fluorescence in situ hybridization (FISH) to detect the presence of human centromeric DNA. Analysis of the bone marrow of transplanted mice revealed that 21.0-45.9% of the cells were human CD45(+) cells. FISH analysis of frozen sections of transplanted mouse liver revealed the presence of engrafted cells positive for human centromeric DNA. That engrafted human cells functioned as hepatocytes was indicated by the expression of human albumin mRNA, as judged by RT-PCR. FISH analysis with human and mouse centromeric DNA probes excluded spontaneous cell fusion as the cause for the generation of human hepatocytes. Human cord blood cells can give rise to hepatocytes in a xenogeneic transplantation model. This model will be useful to further characterize the cord blood progenitors of hepatocytes.