Allogeneic liver transplantation is still the only effective treatment available to patients with liver failure. However, because there is a serious shortage of liver donors, an alternative therapeutic approach is needed. Transplantation of mature hepatocytes has been evaluated in clinical trials, but the long-term efficacy remains unclear and the paucity of donor cells limits this strategy. Stem-cell transplantation is a more promising alternative approach. Several studies have provided information about the mechanism underlying the proliferation and differentiation of hepatic stem/progenitor cells. Moreover, in experimental models of liver disease, transplantation of hepatic stem/progenitor cells or hepatocyte-like cells derived from multipotent stem cells led to donor cell-mediated repopulation of the liver and improved survival rates. However, before stem-cell transplantation can be applied in the clinic to treat liver failure in humans, it will be necessary to overcome several difficulties associated with the technique.