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Studies of transplantation in vivo indicted that bone marrow derived stem cells had a potential to differentiate into mature hepatocytes. However, there are lots of doubts and uncertainties in the influencing factors and control agents of effectively inducing stem cell differentiation in vitro, the efficiency of stem cells' differentiation into hepatocytes and differentiated cells' life-span and functional state, etc. In this study, rat bone marrow derived Thy-l+β2M- cells (BDTCs) were induced to differentiate into hepatocytes by co-culturing with CFSC/HGF feeder layers which expressed hHGF efficiently and stably. RT-PCR and immunofluorescent texts proved induced BDTCs expressed infant and adult hepatocyte specific genes. Further more, these cells displayed functions of indocyanine green (ICG) uptake, ammonium metabolism and albumin production. It was shown that growth factors together with hepatic nonparenchyma cells provided a feasible microenvironment for differentiation of bone marrow stem cells into hepatocytes. The studies not only provided a significant biological model for going deep into the mechanism of stem cell plasticity, but also offered a theoretical and technical foundation of gene and stem cell engineering-based regenerative medicine for end-stage liver diseases. [ABSTRACT FROM AUTHOR]