The concept of a liver stem cell or progenitor cell has not been widely accepted until the last decade. Studies investigating liver regeneration under conditions which totally or substantially preclude hepatocyte proliferation report the proliferation of a subpopulation of small, oval-shaped cells, which are first observed in the portal triad, adjacent to the terminal ducts. These cells, termed liver progenitor oval cells (LPCs) are shown to participate in liver regeneration in a variety of rodent models of chronic liver damage. They express markers common to hepatocytes and cholangiocytes suggesting they are a common precursor of both liver cell lineages. Supporting evidence for liver stem cells has also come from cell tracing studies which show transdifferentiation of bone marrow cells into hepatocytes in both human and animal models. Another important issue is the link between LPCs and hepatocellular carcinoma (HCC). The widening liver donor-recipient gap; a consequence of poor donation rates coupled with increasing incidence of liver disease highlights the importance of establishing the utility of cell transplant as an alternative to treat liver disease. In this regard, liver stem cells and progenitor cells may have a significant role to play. To successfully utilize liver stem cells or LPCs for cell therapy, we have to first develop methods for maintaining and differentiating them in culture. This technology must be based on a thorough understanding of conditions which regulate their behaviour in vitro. In particular, we need to know which growth factors and cytokines affect them and their mechanism of action. Since they are a potential source of HCC, it is also necessary to understand the mechanisms which underlie their transformation to cancer.