To date the molecular signals regulating activation, proliferation, and differentiation of hepatic oval cells are not fully understood. The Wnt family is essential in hepatic embryogenesis and implicated in hepatic carcinogenesis. This study elucidates novel findings implicating Wnt1 in directing oval cell differentiation during the rat 2-acetylaminofluorene (2AAF) and 2/3 partial hepatectomy (PHx) liver regeneration model. Proteins of Wnt family members were predominantly localized in pericentral hepatocytes during liver injury, oval cell activation, and hepatocyte regeneration. In addition, Wnt message increased coinciding with the rise in oval cell number, whereas protein levels peaked immediately after the height of oval cell proliferation. Immunohistochemical analysis demonstrated nuclear translocation of beta-catenin within oval cells throughout the 2AAF/PHx protocol. Furthermore, RNA interference was used in vivo to confirm the physiological requirement of Wnt1 during the oval cell induction. Ultimately, inhibition of Wnt1 resulted in failure of oval cells to differentiate into hepatocytes and alternatively induced atypical ductular hyperplasia. Taken together, these data indicate that in vivo exposure to Wnt1 shRNA inhibited rat oval cell liver regeneration. In the absence of Wnt1 signaling, oval cells failed to differentiate into hepatocytes and underwent atypical ductular hyperplasia, exhibiting epithelial metaplasia and mucin production. Furthermore, changes in Wnt1 levels are required for the efficient regeneration of the liver by oval cells during massive hepatic injury.