Although several types of somatic cells have been reprogrammed into induced pluripotent stem cells (iPSCs) and then differentiated to hepatocyte-like cells (iHeps), the method for generating such cells from renal tubular epithelial cells shed in human urine and transplanting them into animal livers has not been described systematically. We report reprogramming of human urinary epithelial cells into iPSCs and subsequent hepatic differentiation, followed by a detailed characterization of the newly generated iHeps. The epithelial cells were reprogrammed into iPSCs by delivering the pluripotency factors OCT3/4, SOX2, KLF4, and MYC using methods that do not involve transgene integration, such as nucleofection of episomal (oriP/EBNA-1) plasmids or infection with recombinant Sendai viruses. After characterization of stable iPSC lines, a three-step differentiation toward hepatocytes was performed. The iHeps expressed a large number of hepatocyte-preferred genes, including nuclear receptors that regulate genes involved in cholesterol homeostasis, bile acid transport, and detoxification. MicroRNA profile of the iHeps largely paralleled that of primary human hepatocytes. The iHeps engrafted into the livers of Scid mice transgenic for mutant human SERPINA1 after intrasplenic injection. Thus, urine is a readily available source for generating human iHeps that could be potentially useful for disease modeling, pharmacological development, and regenerative medicine.