When there is a massive loss of hepatocytes and/or an inhibition in the proliferative capacity of the mature hepatocytes, activation of a dormant cell population of resident hepatic progenitor cells (HPCs) occurs. Depending on the type of liver damage HPCs generate new hepatocytes and biliary cells to repopulate the liver placing them as potential candidates for cell therapy in human liver failure. Liver injury specific mechanisms through which HPCs differentiate towards mature epithelial cell types are recently become understood. Such new insights will enable us not only to direct HPCs behavior for therapeutic purposes, but also to develop clinically feasible methods for in vivo differentiation of other stem cell types toward functional hepatocytes. This review aimed to provide the current improved knowledge of the role of HPCs niche and its signals in directing the behavior and fate of HPCs and to translate this basic knowledge of HPCs activation/differentiation into its clinical applications.This article is protected by copyright. All rights reserved.