In vitro and in vivo studies have shown that bone marrow (BM) stem cells can differentiate into hepatocytes. However, it is not known whether such a differentiation event occurs during normal liver regeneration process. We investigated the role of endogenous BM cells in liver regeneration following acute injury and phenotypically characterized them. We showed that Lin(-)Sca-1(+) cells proliferate in the BM and subsequently mobilize in the peripheral blood in response to liver injury by CCl(4) or an injury simulating condition. In vitro studies confirmed that the damaged liver tissue was capable of inducing migration of a distinct population of BM cells, phenotypically characterized as Lin(-)CXCR4(+)OSMRbeta(+), which can differentiate into albumin and cytoketarin-18 expressing cells. In order to study the migration of BM cells to the regenerating liver, the hematopoietic system was reconstituted with green fluorescent protein (GFP)(+) BM cells by intra-bone marrow transplantation prior to liver damage. The BM-derived cells were found to express hepatocyte-specific genes and proteins in the regenerating liver. Quantitative polymerase chain reaction analysis for a recipient specific gene (sry) in sorted GFP(+)Alb(+) donor cells suggested that fusion was a rare event in this experimental model. In conclusion, we first demonstrated the potential phenotype of BM cells involved in regeneration of liver from acute injury, primarily by the process of direct differentiation. Disclosure of potential conflicts of interest is found at the end of this article.