Severe liver injury often leads to the proliferation of oval cells, which d
ifferentiate along hepatocytic and biliary lineages. Because oval cells pro
liferate only when hepatocyte replication is impaired, they are considered
to be the progeny of facultative liver stem cells (FLSCs). Identification a
nd isolation of FLSCs has been hampered by the lack of markers that delinea
te these bipotential progenitors. We hypothesized that transition ductal ce
lls are FLSCs because they are located in a unique anatomical niche sharing
tight junctions with a neighboring hepatocyte and another terminal ductula
r cell. Alternatively, it has been proposed recently that bone marrow-deriv
ed stem cells are FLSCs since these cells differentiate along the hepatic l
ineage following colonization of the liver. The intent of this review is to
provide insight into the nature and origin of liver stem cells and to expl
ore the possibility that stem cell technology may lead to the development o
f clinical modalities for the treatment of human liver disease.