Liver progenitor/oval cells differentiate into hepatocytes and biliary epithelial cells, repopulating the liver when the regenerative capacity of hepatocytes is impaired. Recent studies have shown that hematopoietic bone marrow (BM) stem/progenitor cells can give rise to hepatocytes in diseased/damaged liver. One study has reported that BM cells can transdifferentiate into liver progenitor/oval cells, but it has not been proven that the latter can repopulate the liver. To answer this question, we have lethally irradiated female DPP4(-) mutant F344 rats and transplanted them with 50 million wild-type male F344 BM cells. One month after transplantation, the recipient BM was reconstituted with male hematopoietic cells, determined by quantitative polymerase chain reaction using primers for Y chromosome-specific sry gene. In addition, DPP4(+) cells, single or in clusters and predominantly in the periportal region, were detected in all liver sections of recipient rats. Animals were subjected to the following three different liver injury protocols for activation and expansion of oval cells: D-galactosamine, retrorsine/partial hepatectomy (Rs/PH), and 2-acetylaminofluorene/partial hepatectomy (2-AAF/PH). In all three models, prominent expansion and accumulation of cytokeratin 19-positive (CK-19(+)) oval cells was observed. However, most of the DPP4(+) clusters dispersed over time, and their total number decreased. Very few oval cells (less than 1%) showed double DPP4/CK-19 labeling. None of the small hepatocytic clusters in the Rs/PH or 2-AAF/PH model were comprised of DPP4(+) cells. These data demonstrate that the sources of oval cells and small hepatocytes in the injured liver are endogenous liver progenitors and that they do not arise through transdifferentiation from BM cells.