Hepatic stem cells can transdifferentiate into hepatocytes, bile duct cells, pancreatic cells, or intestinal cells. Hepatic stem cells had been thought to be located in the canal of Hering in the liver, but recent work has demonstrated the existence of hepatic stem cells in bone marrow as well. Cell therapy using autologous bone marrow cells has few ethical problems and many applications for treating severe liver disease. Further in vitro and in vivo analysis is crucial to develop the therapy for clinical use.