There are increasing reports of using bone marrow-derived stem cells to treat advanced liver disease. We consider several critical issues that underlie this approach. For example, are there multipotent stem cell populations in human adult bone marrow? Can they develop into liver cells or supporting cell types? What are stromal stem/progenitor cells, and can they promote tissue repair without replacing hepatocytes? Does reversal of end-stage liver disease require new hepatocytes, a new liver microenvironment, both, neither or something else? Although many of these questions are unanswered, we consider the conceptual and experimental bases underlying these issues and critically analyze results of clinical trials of stem cell therapy of end-stage liver disease.