Understanding the identity of lineage-specific cells arising during manipulations of stem cells is necessary for developing their potential applications. For instance, replacement of crucial functions in organ failure by transplantation of suitable stem-cell-derived cells will be applicable to numerous disorders, but requires insights into the origin, function and fate of specific cell populations. We studied mechanisms by which the identity of differentiated cells arising from stem cells could be verified in the context of natural liver-specific stem cells and whether such differentiated cells could be effective for supporting the liver following cell therapy in a mouse model of drug-induced acute liver failure. By comparing the identity of naturally occurring fetal human liver stem cells, we found that cells arising in cultures of human embryonic stem cells (hESCs) recapitulated an early fetal stage of liver cells, which was characterized by conjoint meso-endoderm properties. Despite this fetal stage, hESC-derived cells could provide liver support with appropriate metabolic and ammonia-fixation functions, as well as cytoprotection, such that mice were rescued from acute liver failure. Therefore, spontaneous or induced differentiation of human embryonic stem cells along the hepatic endoderm will require transition through fetal-like stages. This offers opportunities to prospectively identify whether suitable cells have been generated through manipulation of stem cells for cell therapy and other applications.