The generation of human induced pluripotent stem cells (hiPSCs) with a high differentiation potential provided a new source for hepatocyte generation not only for drug discovery and in vitro disease models, but also for cell replacement therapy. However, the reported hiPSC-derived hepatocyte-like cells (HLCs) were not well characterized and their transplantation, as the most promising clue of cell function was not reported. Here, we performed a growth factor-mediated differentiation of functional HLCs from hiPSCs and evaluated their potential for recovery of a carbon tetrachloride (CCl4)-injured mouse liver following transplantation. The hiPSC-derived hepatic lineage cells expressed hepatocyte-specific markers, showed glycogen and lipid storage activity, secretion of albumin (ALB), alpha-fetoprotein (AFP), urea, and CYP450 metabolic activity in addition to low-density lipoprotein (LDL) and indocyanin green (ICG) uptake. Similar results were observed with human embryonic stem cell (hESC)-derived HLCs. The transplantation of hiPSC-HLCs into a CCl4-injured liver showed incorporation of the hiPSC-HLCs into the mouse liver which resulted in a significant enhancement in total serum ALB after 1 week. A reduction of total serum LDH and bilirubin was seen when compared with the control and sham groups 1 and 5 weeks post-transplantation. Additionally, we detected human serum ALB and ALB-positive transplanted cells in both the host serum and livers, respectively, which showed functional integration of transplanted cells within the mouse livers. Therefore, our results have opened up a proof of concept that functional HLCs can be generated from hiPSCs, thus improving the general condition of a CCl4-injured mouse liver after their transplantation. These results may bring new insights in the clinical applications of hiPSCs once safety issues are overcome.