Donor organ shortage is still the major obstacle for the clinical application of hepatocyte transplantation in the treatment of liver diseases. However, generation of hepatocyte-like cells from mesenchymal stem cells (MSCs) has become a real alternative to the isolation of primary hepatocytes. MSCs are extracted from the tissue by collagenase digestion and enriched by their capacity to grow on plastic surfaces. Enriched cells display distinct mesenchymal surface markers and are capable of multiple lineage differentiation. In the presence of specific growth conditions, the cells adopt functional features of differentiated hepatocytes. After orthotopic transplantation, differentiated human stem cells engraft in the host liver parenchyma of immunocompromised mice. This protocol describes the in vitro differentiation of stem cells from human bone marrow and their transplantation into livers of immunodeficient mice. The cell culture procedures take about 4-5 weeks, and cells engrafted in the mouse liver may be detected 2-3 months after transplantation.