The liver has considerable inherent regenerative capacity through hepatocyte division and hepatic progenitor cell proliferation. In chronic disease regeneration eventually fails and liver transplantation is the only curative treatment. Current work aims to restore liver mass and functionality either through transplantation of stem cell derived hepatocyte-like cells or by stimulating endogenous liver repair. Human embryonic stem cells (ESCs) and adult somatic cells can be differentiated into hepatocyte-like cells with potential use in drug testing, bio-artificial livers and transplantation. These cells still have some limitations in functionality, understanding further human liver development and improving tissue culture is required. The use of stem cells and their progeny in animal models of liver disease has been encouraging and stimulated clinical trials to commence.