Recently, evidence has been provided that mesenchymal stem/progenitor cells (MSC) from various sources (bone marrow, adipose tissue, skin, placenta, umbilical cord) could occasionally overcome lineage borders and differentiate into endodermal (hepatocytes) and ectodermal (neural cells) cell types in vitro. Whereas unidirectional differentiation into other mesenchymal cell types, including adipocytes, chondrocytes, and osteoblasts, readily occurs in the presence of a simple cocktail of growth factors and nutrients, successful bypassing of lineage borders mainly depends on multistep processes in a coordinated signaling network. Here, we provide a reproducible basic methodology to differentiate adult MSC into functional hepatocytes in a sequential and time-dependent way. In addition, focus lies on the functional characterization of MSC-derived hepatocyte-like cells. In particular, we provide a detailed modus operandi to measure the inducible cytochrome P450 (CYP)-dependent activity of MSC-derived hepatocyte-like cells.