Inherited deficiencies in critical components of metabolic pathways are the primary cause of many liver and lysosomal disorders, most of which are incurable. Stem cell transplantation may offer a new type of treatment for these diseases. We have isolated hepatocyte precursors from human fetal livers. These cells were highly proliferative in vitro in media with or without serum. Expanded hepatocyte precursors expressed endoderm and early hepatocyte markers. The precursors synthesized a large number of molecules related to human metabolic diseases and released some of them into the environment. In a homing test, these cells migrated preferentially into the liver. When transplanted into fetal sheep liver, they incorporated into the liver tissue and differentiated into hepatocytes. Transplantation of the liver precursors to alpha-l-iduronidase-deficient mice partially corrected the enzyme deficiency. Data from these studies suggest that in vitro expanded human liver precursor cells are a potential cell source for the treatment of liver- and lysosome-related disorders.