Hepatic tumors, exhibiting mature hepatocytes and undifferentiated cells merging with cholangiocyte and hepatocyte phenotypes, are frequently described. The mechanisms by which they occur remain unclear. We report differentiation and transdifferentiation behaviors of human HepaRG cells isolated from a differentiated tumor developed consecutively to chronic HCV infection. We demonstrate that, in vitro, proliferating HepaRG cells differentiate toward hepatocyte-like and biliary-like cells at confluence. If hepatocyte-like cells are selectively isolated and cultured at high cell density, they proliferate and preserve their differentiation status. However, when plated at low density, they transdifferentiate into hepatocytic and biliary lineages through a bipotent progenitor. In accordance, transplantation of either undifferentiated or differentiated HepaRG cells in uPA/SCID mouse damaged liver gives rise mainly to functional human hepatocytes infiltrating mouse parenchyma. Analysis of the differentiation/transdifferentiation process reveals that: (1) H epatic tumors with combined hepatocellular cholangiocarcinoma have been frequently described for instance, hepatoblastoma with cholangioblastic features in young patients 1 and HCCs with dual expression of hepatocyte and bile duct markers in adult patients suffering from diseases related to HCV and/or HBV infection. 2 Such tumors usually contain mature hepatocytes and so-called transitional areas that consist of undifferentiated cells that have morphological and immunological features of both hepatocytes and cholangiocytes. 3 Co-expression of hepatocytic and biliary markers suggests involvement of hepatic progenitor cells in development of these human tumors and supports the concept of genetic events to explain their abnormal growth during tumor formation. 4 However, mechanisms of occurrence of these progenitors and abnormal control of their expansion and differentiation are still unclear.Hepatic progenitor cells, also referred to as oval cells in rodents, have been defined as immature epithelial cells able to differentiate toward both biliary and hepatocytic lineages. The smallest ramification of the biliary tree in adult liver, the canal of Hering, may constitute the niche for these hepatic progenitor cells. 5 They are few in number, and because bile ductular and hepatocytic cells have a tremendous capacity to proliferate and differentiate, heAbbreviations: BrdU, bromodeoxyuridine; HNF, hepatocyte nuclear factor; RT, reverse transcription.