The liver has adapted to the inflow of ingested toxins by the evolutionary development of unique regenerative properties and responds to injury or tissue loss by the rapid division of mature cells. Proliferation of the parenchymal cells, i.e. hepatocytes and epithelial cells of the bile duct, is regulated by numerous cytokine/growth-factor-mediated pathways and is synchronised with extracellular matrix degradation and restoration of the vasculature. Resident hepatic stem/progenitor cells have also been identified in small numbers in normal liver and implicated in liver tissue repair. Their putative role in the physiology, pathophysiology and therapy of the liver, however, is not yet precisely known. Hepatic stem/progenitor cells also known as "oval cells" in rodents have been implicated in liver tissue repair, at a time when the capacity for hepatocyte and bile duct replication is exhausted or experimentally inhibited (facultative stem/progenitor cell pool). Although much more has to be learned about the role of stem/progenitor cells in the physiology and pathophysiology of the liver, experimental analysis of the therapeutic value of these cells has been initiated. Transplantation of hepatic stem/progenitor cells or in vivo pharmacological activation of the pool of hepatic stem cells may provide novel modalities for the therapy of liver diseases. In addition, extrahepatic stem cells (e.g. bone marrow cells) are being investigated for their contribution to liver regeneration. Hepatic progenitor cells derived from embryonic stem cells are included in this review, which also discusses future perspectives of stem cell-based therapies for liver diseases.