Oval cells function as compensatory cells in severe liver injury and are thought to be equivalent to liver stem/progenitor cells. We isolated oval cells from the liver of Long-Evans Cinnamon (LEC) rats by isopyknic centrifugation in a Percoll gradient. The cells were gamma-glutamyl transpeptidase (GGTP)-positive, alpha-fetoprotein-positive, and cytokeratin (CK) 18- and CK 19-positive, but albumin-negative in the cells. When oval cells were transplanted to the liver, they were transformed into hepatocytes. To evaluate albumin biosynthesis, we transplanted oval cells into the liver of Nagase analbuminemic and LEC double mutant rats. The albumin level in the serum of transplanted rats was increased and maintained for up to 10 weeks. These results indicated that the oval cells isolated from LEC rats can differentiate into hepatocytes in vivo.