The liver has enormous regenerative capacity. Restitution of the liver in response to different injuries involves proliferation of cells at different levels of liver lineage. Mature hepatocytes, which are normally dormant, could undergo rapid replication with a near infinite capacity to proliferate. When the replication of mature hepatocytes is inhibited, a reserve compartment of bipotential hepatic progenitor/stem cells is activated. The degree of activation appears to correlate with the degree of inflammation and stage of chronic liver disease. Deregulation of key regulatory signaling pathways such as transforming growth factor-beta, Wnt, hepatocyte growth factor, insulin-like growth factor, transforming growth factor-alpha and epidermal growth factor in this progenitor/stem cell population could give rise to HCC. Further understanding of these key signaling pathways and the molecular and genetic alterations associated with HCC could provide major advances in new therapeutic and diagnostic modalities.