The liver is the central organ for metabolism and has strong regenerative capability. Although the liver has been studied mostly biochemically and histopathologically, genetic studies using gene-targeting technology have identified a number of cytokines, intracellular signaling molecules, and transcription factors involved in liver development and regeneration. In addition, various in vitro systems such as fetal liver explant culture and primary culture of fetal liver cells have been established, and the combination of genetic and in vitro studies has accelerated investigation of liver development. Identification of the cell-surface molecules of liver progenitors has made it possible to identify and isolate liver progenitors, making the liver a unique model for stem cell biology. In this review, we summarize progresses in understanding liver development and regeneration.