Tissue progenitor cells are an attractive target for regenerative therapy. In various organs, bone marrow cell (BMC) therapy has shown promising preliminary results, but to date no definite mechanism has been demonstrated to account for the observed benefit in organ regeneration. Tissue injury and regeneration is invariably accompanied by macrophage infiltration, but their influence upon the progenitor cells is incompletely understood, and direct signaling pathways may be obscured by the multiple roles of macrophages during organ injury. We therefore examined a model without injury; a single i.v. injection of unfractionated BMCs in healthy mice. This induced ductular reactions (DRs) in healthy mice. We demonstrate that macrophages within the unfractionated BMCs are responsible for the production of DRs, engrafting in the recipient liver and localizing to the DRs. Engrafted macrophages produce the cytokine TWEAK (TNF-like weak inducer of apoptosis) in situ. We go on to show that recombinant TWEAK activates DRs and that BMC mediated DRs are TWEAK dependent. DRs are accompanied by liver growth, occur in the absence of liver tissue injury and hepatic progenitor cells can be isolated from the livers of mice with DRs. Overall these results reveal a hitherto undescribed mechanism linking macrophage infiltration to DRs in the liver and highlight a rationale for macrophage derived cell therapy in regenerative medicine.