Background: Diabetes is a group of metabolic diseases characterized by hyperglycemia resulting from hypoinsulinemia, defective insulin action, or both. ß-cells regeneration from stem cells or pancreatic progenitor cells is an attractive method for diabetic treatment. Hepatic oval cells (HOCs), intra-hepatic cells of bi-potent progenitor capabilities, can proliferate and differentiate into both hepatocytes and bile duct epithelial cells. They had the potentiality to transdifferentiate into pancreatic endocrine cells, as both liver and pancreas have the same origin (upper primitive foregut endoderm). Vitamin K2 can promote recovery in patients with liver cirrhosis and prevent insulin resistance reducing the risk of type 2 diabetes.Aim of the work: Evaluating the histological and immunohistochemical changes in hepatocytes and oval cells in diabetic and non-diabetic rats' liver under treatment with vitamin K2.Materials and methods: 88 adult male albino rats were divided into 3 groups: Group I (control group), Group II (diabetic group); where diabetes was induced using single intraperitoneal (IP) dose of streptozotocin (STZ) following 2 weeks of high fat diet and Group III (treatment group) where diabetic rats were given daily oral vitamin K2 for 20 days (5 days on and 5 days off). Random blood sugar was measured for each group at day 0, 16 and then every 5 days till the end of the experiment (36 days). All groups' sections were subjected to H&E and immunohistochemical stains for CD34, CK19 and insulin. Optical density for CD34 positive immunoreaction and mean area percent for CK19 and insulin immunoreaction were measured and data were statistically analyzed.    Results and Conclusion: HOCs gave a positive reaction of changing into insulin producing cells in diabetic rats thus they may be modified to change into extra pancreatic source of insulin. Additionally, administration of vitamin K2 helped increase the proliferative ability of the HOCs in case of diabetes.