ESCs are a potential cell source for cell therapy. However, there is no evidence that cell transplantation using ESC-derived hepatocytes is therapeutically effective. The main objective of this study was to assess the therapeutic efficacy of the transplantation of ESC-derived endodermal cells into a liver injury model. The beta-galactosidase-labeled mouse ESCs were differentiated into alpha-fetoprotein (AFP)-producing endodermal cells. AFP-producing cells or ESCs were transplanted into transgenic mice that expressed diphtheria toxin (DT) receptors under the control of an albumin enhancer/promoter. Selective damage was induced in the recipient hepatocytes by the administration of DT. Although the transplanted AFP-producing cells had repopulated only 3.4% of the total liver mass 7 days after cell transplantation, they replaced 32.8% of the liver by day 35. However, these engrafted cells decreased (18.3% at day 40 and 7.9% at day 50) after the cessation of DT administration, and few donor cells were observed by days 60-90. The survival rate of the AFP-producing cell-transplanted group (66.7%) was significantly higher in comparison with that of the sham-operated group (17.6%). No tumors were detected by day 50 in the AFP-producing cell-transplanted group; however, splenic teratomas did form 60 days or more after transplantation. ESC transplantation had no effect on survival rates; furthermore, there was a high frequency of tumors in the ESC-transplanted group 35 days after transplantation. In conclusion, this study demonstrates, for the first time, that ESC-derived endodermal cells improve the survival rates after transplantation into mice with induced hepatocellular injury. Disclosure of potential conflicts of interest is found at the end of this article.