Liver transplantation is the only life-saving procedure for patients with end-stage liver disease. However, its potential benefits are hampered by many disadvantages, such as the relative shortage of donors, operative risks, and high costs. These issues have prompted the search for new alternative therapies for irreversible liver disease. Stem cell therapy, with the ability for self-renewal and potential for multilineage differentiation, is a promising alternative approach. Several studies have demonstrated that transplantation of hepatic stem/progenitor cells or hepatocyte-like cells derived from multipotent stem cells leads to donor cell-mediated repopulation of the liver and improved survival rates in experimental models of liver disease. However, a registered clinical application based on stem cell technology will take at least an additional 5 to 10 years because of some limitations; e.g. the lack of suitable cell sources and risk of teratoma formation. This review summarizes the general understanding of the therapeutic potentials of stem cells in liver disease, including the sources, mechanisms, and delivery methods of hepatic stem cells in liver regeneration, and discusses some challenges for their therapeutic application.