A previous study reported that Yi Guan Jian (YGJ) may increase the proliferation and differentiation of hepatic oval cells in a rat liver cirrhosis model. The aim of the present study was to investigate the effect and mechanism of action of YGJ on inducing hepatic differentiation in bone marrow‑derived mesenchymal stem cells (BM‑MSCs) via stromal‑cell derived factor‑1 (SDF‑1). Murine BM‑MSCs were isolated with whole bone marrow adherence, then identified by immunocytochemical staining and flow cytometry. Passage 2 cells were divided into 8 groups and their differentiation was induced by cell factors added to the medium, including hepatocyte growth factor (HGF), SDF‑1 and YGJ. Each of the cell factors was used alone and any two or three of them were combined to establish different cell microenvironments in the different treatment groups. Albumin (ALB) was selected as a hepatocellular marker and cytokeratin‑18 (CK‑18) as a cholangiocellular marker. The protein and mRNA expression levels of ALB and CK‑18 were used to determine the differentiation of BM‑MSCs using immunocytochemical staining, western blotting and reverse transcription‑quantitative polymerase chain reaction on days 7, 14, 21 and 28 during induction. The relative expression levels of ALB and CK‑18 resulted in time‑dependent increases in the groups supplemented only with HGF, SDF‑1 or YGJ. Combination treatment of any two HGF, SDF‑1 and YGJ led to a higher expression of ALB and CK‑18 compared with only one cell factor treatment. Additionally, when all three were used in a combined treatment the expression levels of ALB and CK‑18 occurred at an earlier time and was higher overall. Therefore, the present study suggested that YGJ had an effect on inducing hepatic differentiation in BM‑MSCs via SDF‑1 and may act in a synergistic manner with HGF and SDF‑1.