Hepatic oval cells are likely to be activated during advanced stage of liver fibrosis to reconstruct damaged hepatic tissue. However, their scarcity, difficulties in isolation, and in vitro expansion hampered their transplantation in fibrotic liver. This study was aimed to investigate the repair potential of in vitro differentiated hepatic oval-like cells in CCl -induced liver fibrosis. BMSCs and oval cells were isolated and characterized from C57BL/6 GFP mice. BMSCs were differentiated into oval cells by preconditioning with HGF, EGF, SCF, and LIF and analyzed for the oval cells-specific genes. Efficiency of oval cells to reduce hepatocyte injury was studied by determining cell viability, release of LDH, and biochemical tests in a co-culture system. Further, in vivo repair potential of differentiated oval cells was determined in CCl -induced fibrotic model by gene expression analysis, biochemical tests, mason trichrome, and Sirius red staining. Differentiated oval cells expressed hepatic oval cells-specific markers AFP, ALB, CK8, CK18, CK19. These differentiated cells when co-cultured with injured hepatocytes showed significant hepato-protection as measured by reduction in apoptosis, LDH release, and improvement in liver functions. Transplantation of differentiated oval cells like cells in fibrotic livers exhibited enhanced homing, reduced liver fibrosis, and improved liver functions by augmenting hepatic microenvironment by improved liver functions. This preconditioning strategy to differentiate BMSCs into oval cell leads to improved survival and homing of transplanted cells. In addition, reduction in fibrosis and functional improvement in mice with CCl -induced liver fibrosis was achieved.