The 2-acetylaminofluorene (AAF)/partial hepatectomy (PH) model is one of the most extensively studied experimental systems for oval cell proliferation and differentiation. We have previously described the oval cells as forming ductular structures surrounded by basement membrane, representing extensions of the canals of Hering. Herein we analyze the differentiation of oval cells into hepatocytes after varying degrees of liver damage induced by AAF. At a low dose of AAF, most oval cells synchronously differentiate into small hepatocytes by 6 days after the PH, resulting in complete restoration of the liver structure in 10 days. Higher doses of AAF delay the differentiation process and the new hepatocytes form foci, in contrast to what is observed at the low dose. Qualitatively, the differentiation process seems to be identical at the cellular level under both conditions. The transition from the expanding oval cell population into hepatocytes was correlated with the upregulation of hepatocyte nuclear factor 4 and the disappearance of the basement membrane. Also, the differentiation of oval cells into hepatocytes coincided with the loss of alpha-fetoprotein and OV-6 staining, and the replacement of the biliary cell-specific ␣6 integrin and connexin 43 with the hepatocyte-specific ␣1 integrin and connexin 32. In addition, bile canaliculi form between the new hepatocytes. In conclusion, these results indicate the rate of oval cell differentiation into hepatocytes is context dependent and suggest that, under favorable conditions, oval cells can complete this process much faster than previously appreciated.