A small animal model harboring a functional human liver cell xenograft would be a useful tool to study human liver cell biology, drug metabolism, and infections with hepatotropic viruses. Here we describe the repopulation, organization, and function of human hepatocytes in a mouse recipient and the infections with hepatitis B virus (HBV) and hepatitis C virus (HCV) of the transplanted cells. Homozygous urokinase plasminogen activator (uPA)-SCID mice underwent transplantation with primary human hepatocytes, and at different times animals were bled and sacrificed to analyze plasma and liver tissue, respectively. The plasma of mice that were successfully transplanted contained albumin and an additional 21 human proteins. Liver histology showed progressive and massive replacement of diseased mouse tissue by human hepatocytes. These cells were accumulating glycogen but appeared otherwise normal and showed no signs of damage or death. They formed functional bile canaliculi that connected to mouse canaliculi. Besides mature hepatocytes, human hepatic progenitor cells that were differentiating into mature hepatocytes could be identified within liver parenchyma. Infection of chimeric mice with HBV or HCV resulted in an active infection that did not alter the liver function and architecture. Electron microscopy showed the presence of viral and subviral structures in HBV infected hepatocytes. In conclusion, human hepatocytes repopulate the uPA(+/+)-SCID mouse liver in a very organized fashion with preservation of normal cell function. The presence of human hepatic progenitor cells in these chimeric animals necessitates a critical review of the observations and conclusions made in experiments with isolated "mature" hepatocytes. Supplementary material for this article can be found on the HEPATOLOGY website (http://www.interscience.wiley.com/jpages/0270-9139/suppmat/index.html).