Ischemia-reperfusion (I/R) associated with small-for-size liver transplantation (SFSLT) impairs liver graft regeneration. Mesenchymal stem cells (MSCs) have the capability, under specific conditions, of differentiating into hepatocytes. Hepatocyte growth factor (HGF) has potent anti-apoptotic and mitogenic effects on hepatocytes during liver injury, and has been utilized in many experimental and clinical applications. In this study, we implanted HGF-expressing MSCs into liver grafts via the portal vein, using a 30% small-for-size rat liver transplantation model. HGF, c-met expression, hepatic injury and liver regeneration were assessed after liver transplantation. Our study demonstrated that MSCs over-expressing HGF prevented liver failure and reduced mortality in rats after SFSLT. These animals also exhibited improved liver function and liver weight recovery during the early post-transplantation period. Using green fluorescent protein (GFP) gene as a marker, we demonstrated that the engrafted cells and their progeny incorporated into remnant livers and produced albumin. These findings suggest that MSCs genetically modified to over-express HGF and implanted in the liver graft, may offer a novel approach to promoting liver regeneration after small-for-size transplantations.