Morbidity and mortality from cirrhosis is increasing rapidly in the Western world. Currently the only effective treatment is liver transplantation, an increasingly limited and expensive resource. Consequently, there has been great hope that stem cells may offer new therapeutic approaches in the management of liver disease. In this review we critically appraise the 11 published clinical studies of bone marrow stem cells in liver disease, and focus on the unresolved issues regarding their role. We outline the different mechanisms by which stem cells may impact on liver disease, as well as highlight the importance of the type of stem cell chosen. There are multiple different stem cell populations that have, in rodent studies, been shown to have differing effects on liver regeneration and fibrogenesis/degradation. Thus, choice of cell should reflect the desired or expected mechanism of action. The importance, and methods, of studying the fate of stem cells infused in clinical studies is emphasized as we seek to translate observations in rodents into the clinical setting. Finally, we discuss which cohorts of patients with liver disease would benefit from stem cell therapy, as well as establish minimum criteria for future clinical trials of stem cells.