Cord blood is an attractive cell source in regenerative medicine and represents an alternative to bone marrow. The aim of this study was to investigate whether human umbilical cord blood mononuclear (HUCBM) cells might be valuable in hepatic regenerative medicine. HUCBM cells differentiated in vitro into hepatocytes, as suggested by expression of albumin, cytokeratin-18, glutamine synthetase, alpha-fetoprotein, and cytochrome P450 3A4 at both mRNA and protein levels in a time-dependent fashion. In contrast, the hematopoietic phenotype was gradually lost, as demonstrated by disappearance of CD45 expression. The regenerative potential of HUCBM cells was tested by using a human-to-rat xenotransplant model in which HUCBM cells were intraportally injected into rats with D-galactosamine-induced hepatitis. Liver histology and biochemical markers of hepatic damage were determined. Presence of human cells was detected in blood and liver of both control and D-galactosamine-treated animals. Cell transplantation produced an improvement in both the histological damage and liver function, as demonstrated by plasma values of alkaline phosphatase, gamma-glutamyl transferase, lactate dehydrogenase, and total and direct bilirubins. Results obtained suggest that HUCBM cells are capable of hepatic engraftment in this human-to-rat xenotransplant model and that transplantation of HUCBM cells may be a suitable therapy for liver disease.