The origin of the intrahepatic bile ducts in the embryonic mouse liver was investigated. At 12.5 and 13.5 gestation days in the C3H/Tw strain mouse, the liver parenchyma contains morphologically and histochemically homogeneous immature hepatocytes but not bile duct cells. When the liver fragments were cultured in the testis, immature hepatocytes differentiated into large hepatocytes for the most part and also into bile duct cells. In contrast, when the similar liver fragments were cultured under the skin of newborn mice, bile duct cells differentiated much earlier in all transplants than those cultured in the testis. These bile duct cells were considered to be the intrahepatic bile duct cells, since they did not form biliary glands but possessed a basal lamina and histochemical characteristics of intrahepatic bile duct cells of the normal liver. The origin of the endodermal epithelial cells in the mouse liver is discussed with special attention to the differentiation of the intrahepatic bile duct cells from the immature hepatocytes.