A new group of blood-derived CD34+ progenitor cells (BDPCs) with the ability to expand and differentiate into functional hepatocyte-like cells and promote liver regeneration is reported. With their ease of access, application through the peripheral blood, and the capability of rapid expansion and hepatic differentiation, BDPCs have great potential as a cell-based therapy for liver disease., The low availability of functional hepatocytes has been an unmet demand for basic scientific research, new drug development, and cell-based clinical applications for decades. Because of the inability to expand hepatocytes in vitro, alternative sources of hepatocytes are a focus of liver regenerative medicine. We report a new group of blood-derived CD34+ progenitor cells (BDPCs) that have the ability to expand and differentiate into functional hepatocyte-like cells and promote liver regeneration. BDPCs were obtained from the peripheral blood of an adult mouse with expression of surface markers CD34, CD45, Sca-1, c-kit, and Thy1.1. BDPCs can proliferate in vitro and differentiate into hepatocyte-like cells expressing hepatocyte markers, including CK8, CK18, CK19, α-fetoprotein, integrin-β1, and A6. The differentiated BDPCs (dBDPCs) also display liver-specific functional activities, such as glycogen storage, urea production, and albumin secretion. dBDPCs have cytochrome P450 activity and express specific hepatic transcription factors, such as hepatic nuclear factor 1α. To demonstrate liver regenerative activity, dBDPCs were injected into mice with severe acute liver damage caused by a high-dose injection of carbon tetrachloride (CCl4). dBDPC treatment rescued the mice from severe acute liver injury, increased survival, and induced liver regeneration. Because of their ease of access and application through peripheral blood and their capability of rapid expansion and hepatic differentiation, BDPCs have great potential as a cell-based therapy for liver disease. Significance Hematopoietic stem/progenitor cell expansion and tissue-specific differentiation in vitro are challenges in regenerative medicine, although stem cell therapy has raised hope for the treatment of liver diseases by overcoming the scarcity of hepatocytes. This study identified and characterized a group of blood-derived progenitor cells (BDPCs) from the peripheral blood of an adult mouse. The CD34+ progenitor-dominant BDPCs were rapidly expanded and hepatically differentiated into functional hepatocyte-like cells with our established coculture system. BDPC treatment increased animal survival and produced full regeneration in a severe liver injury mouse model caused by CCl4. BDPCs could have potential for liver cell therapies.