Mesenchymal progenitor cells, isolated from adult bone marrow, have been shown to have utility for autologous tissue engineering. The possibility of isolating from the fetal hematopoietic system a cell population with similar potential, which could be used for autologous reconstruction of prenatally diagnosed congenital anomalies, has not been explored to date. Liver stromal cells isolated from a portion of the right lateral hepatic lobe of midgestation fetal lambs were expanded in vitro. Passage 1 cells displayed a uniform fibroblast-like morphology but could be induced to differentiate into skeletal muscle, adipocytes, chondrocytes, and endothelial cells by selective medium supplementation. By manipulating the extracellular matrix in vitro, spontaneously contracting cardiac myocyte-like cells could be generated as well. Multilineage differentiation was confirmed by morphology, protein expression, and upregulation of lineage-specific mRNA. The potential for engineering myocardial tissue was then investigated by transplanting early-passage progenitor cells, organized on a three-dimensional matrix, into the ventricle of an immunocompromised rat utilizing a previously described model of left ventricular tissue engineering. Survival, incorporation into the host myocardium, and cardiomyocytic differentiation of the transplanted cells were confirmed. We have demonstrated that mesenchymal progenitor cells with multilineage potential can be isolated from the fetal liver and have potential utility for autologous tissue engineering.