Because of its physiological role and its central function in metabolism and homeostasis, the liver is exposed to an environment rich in toxins. In addition, the liver has to cope with various infectious pathogens, in particular hepatotropic viruses. Therefore, the liver needs efficient and highly regulated regeneration mechanisms. Under normal circumstances the liver shows a low rate of hepatocyte renewal but in the event of liver injury, for example, acute liver damage or drug intoxications, hepatocytes display a remarkable capacity to divide and to restore the liver parenchyma. Because of their enormous capability to regenerate the liver, which is unique among differentiated cells in human organs, hepatocytes function as stem cells. However, if the proliferation of hepatocytes is impaired, as in liver cirrhosis, a progenitor cell population is activated and serves as reserve compartment for liver restoration. Hepatic progenitor cells are bipotential and are located in the canals of Hering, the most peripheral branches of the biliary system. According to the current paradigm, hepatic progenitor cells drive liver regeneration in end-stage liver diseases, where hepatocytes become senescent and may therefore be a target cell population for carcinogenesis. In this review, we revisit landmark studies, summarize the current nomenclature, and discuss recent data elucidating the characteristics and the functional role of hepatic stem and progenitor cells in liver diseases and hepatocarcinogenesis.