There is increasing evidence that human mesenchymal stem cells (hMSCs) can be a valuable, transplantable source of hepatocytes. Most of the hMSCs preparations used in these studies were likely heterogeneous cell populations, isolated by adherence to plastic surfaces or by density gradient centrifugation. Therefore, the participation of other unknown trace cell populations cannot be rigorously discounted. Here we report the isolation and establishment of a cloned human MSC line (chMSC) from human bone marrow primary culture, through which we confirmed the hepatic differentiation capability of authentic hMSCs. chMSCs expressed markers of mesenchymal cells, but not markers of hematopoietic stem cells. In vitro, chMSCs can differentiate into either mesenchymal cells or cells exhibiting hepatocyte-like phenotypes. When transplanted intrasplentically into carbon tetrachloride-injured livers of SCID mice, EGFP-tagged chMSCs engrafted into the host liver parenchyma, exhibited typical hepatocyte morphology, form a three-dimensional architecture, and differentiate into hepatocyte-like cells expressing human albumin and α-1-anti-trypsin. By confocal microscopy, ultrafine intercellular nanotubular structures were visible between adjacent transplanted and host hepatocytes. We postulate that these structures may assist in the phenotype conversion of chMSCs, possibly by exchange of cytoplasmic components between native hepatocytes and transplanted cells. Thus, a clonal pure population of hMSCs, which can be expanded in culture, may have potential as a cellular source for substitution damaged cells in hepatic injury. J. Cell. Biochem. 108: 693–704, 2009. © 2009 Wiley-Liss, Inc.