A cell fraction containing small hepatocytes and nonparenchymal cells was isolated from the adult rat liver and was cultured in the presence of vitamin C. epidermal growth factor, nicotinamide, and dimethylsulfoxide. All of the small hepatocytes that had attached to a dish expressed hepatocytic phenotypes such as albumin, transferrin, and cytokeratin (CK)8 and CK18 but not biliary markers such as BD1, CK7, and CK19. Single hepatocytes started to proliferate and grew into colonies. The growth potential was variable among the cells, the highest case being that a single cell produced a colony containing over 100 cells in 10 days. The hepatocytes in the colony developed through a proliferation phase and then a differentiation phase. They showed very high bromodeoxyuridine labeling indexes during the first 7 days (proliferation phase), which gradually decreased thereafter. Phenotypic alterations took place at 7 to 10 days, and some hepatocytes started to express mature hepatocyte markers and biliary markers (differentiation phase). The presence of cells that coexpress albumin and biliary markers (CK7 and CK19) was demonstrated by double immunocytochemistry. In addition, cells were identified that ceased to express albumin and in turn were positive for CK19 or CK7. Therefore, the colony was considered to contain liver progenitor-like cells that can differentiate during culture into cells expressing phenotypes of mature hepatocytes or biliary epithelial cells.