Background: Orthotopic liver transplantation is the only definitive therapeutic option available for patients with chronic end-stage liver disease. However, a shortage of suitable donor organs and requirement for immunosuppression restrict its usage, highlighting the need to find suitable alternatives. Stem cell therapy has emerged as a novel approach for the treatment of many human degenerative diseases such as liver cirrhosis. Mesenchymal stem cells (MSC) have the capacity of self-renewal and differentiation into cells of various lineages, MSCs are the most potent component of bone marrow cells in hepatic dif¬feren¬tiation so they can be isolated from bone marrow (BM) and induced to differentiate into hepatocyte-like cells. Aim of Work: This study aims at isolation of MSCs from BM, characterizing them, and inducing differentiation of these cells into hepatocyte under in vitro culture conditions. Methods: Mononuclear cells were first isolated from BM by density gradient separation, and then they were expanded in vitro, the adherent MSCs were then expanded with transferring into passages by trypsinization after (90 – 95%) confluency and characterized by flow cytometry. Finally, BM-MSCs were induced to differentiate into hepatocyte-like cells by hepatocyte growth factor (HGF) and basic fibroblast growth factor (b-FGF). Differentiated cells were examined for the CK-18 gene expression. Results: MSC were isolated and examined until 80% confluence is reached, the adhered cells were fibroblast-like and grew as a whirlpool. Flow cytometry analysis for the expression of the MSC-specific markers found that CD105 ranged from 44.5 to 90 with a mean of (71.8+ 11.0),while CD44 ranged from 36 to 83 with a mean of (68.4+ 11.72), and CD34 ranged from 0.57 to5.6 with a mean of (1.76+ 1.35), following hepatocyte induction reverse transcriptase–polymerase chain reaction (RT-PCR) the hepatocyte-specific marker cytokeratin 18 (CK-18) demonstrated that In day 4 the Percentage of CK-18 gene expression within Group A was 75% ,in Group B it was 100% while in Group C it was 87.5% ,in day 8 the Percentage of CK-18 gene expression within Group A was 75% ,in Group B it was 100% while in Group C it was 87.5% and in day 16 the Percentage of CK-18 gene expression within Group A was 62.5% ,in Group B it was 100% while in Group C it was 87.5%.ConclusionsThis study demonstrates that BM derived MSCs can differentiate into functional hepatocyte-like cells following the induction by HGF and b-FGF. MSC can serve as a favorable cell source for tissue engineering in the treatment of liver disease.