We report the differentiation potential of an immortalized non-tumorigenic human liver epithelial cell line, THLE-5b. Under basic culture conditions THLE-5b showed undifferentiated phenotypes. When grown as cell aggregates, THLE-5b exhibited a hepatocyte-like ultrastructure, ammonia metabolic activity and several other indicators that suggest hepatocytic maturation, including up-regulation or induction of liver-specific genes such as albumin and tryptophane 2,3-dioxygenase, and down-regulation of biliary cell markers such as gamma-glutamyl transpeptidase (GGT). Under these conditions, transcriptional factors such as HNF-1 and HNF-4alpha were also up-regulated or induced. In Matrigel culture, expression of GGT was up-regulated. THLE-5b expressed both albumin and alpha 1-antitrypsin, but lost expression of CK19 in severe combined immunodeficient mice. Thus, THLE-5b can be aligned with progenitor cells, which are committed to the hepatocytic or biliary epithelial cell lineage. These results imply that bipotent progenitor cell populations similar to THLE-5b cells may exist in adult human liver.