The emerging fields of tissue engineering and biomaterials have begun to provide potential treatment options for liver failure. The goal of the present study is to investigate the ability of a poly L-lactic acid (PLLA) nanofiber scaffold to support and enhance hepatic differentiation of human bone marrow-derived mesenchymal stem cells (hMSCs). A scaffold composed of poly L-lactic acid and collagen was fabricated by the electrospinning technique. After characterizing isolated hMSCs, they were seeded onto PLLA nanofiber scaffolds and induced to differentiate into a hepatocyte lineage. The mRNA levels and protein expression of several important hepatic genes were determined using RT-PCR, immunocytochemistry and ELISA. Flow cytometry revealed that the isolated bone marrow-derived stem cells were positive for hMSC-specific markers CD73, CD44, CD105 and CD166 and negative for hematopoietic markers CD34 and CD45. The differentiation of these stem cells into adipocytes and osteoblasts demonstrated their multipotency. Scanning electron microscopy showed adherence of cells in the nanofiber scaffold during differentiation towards hepatocytes. Our results showed that expression levels of liver-specific markers such as albumin, α-fetoprotein, and cytokeratins 8 and 18 were higher in differentiated cells on the nanofibers than when cultured on plates. Importantly, liver functioning serum proteins, albumin and α-1 antitrypsin were secreted into the culture medium at higher levels by the differentiated cells on the nanofibers than on the plates, demonstrating that our nanofibrous scaffolds promoted and enhanced hepatic differentiation under our culture conditions. Our results show that the engineered PLLA nanofibrous scaffold is a conducive matrix for the differentiation of MSCs into functional hepatocyte-like cells. This represents the first step for the use of this nanofibrous scaffold for culture and differentiation of stem cells that may be employed for tissue engineering and cell-based therapy applications.