Objective To solve the shortage of hepatocytes for l iver tissue engineering, to explore the possibil ity of prol iferation of rat bone marrow mesenchymal stem cells (BMSCs) and the feasibil ity of differentiation of BMSCs into hepatocyteswith a culture system containing cholestatic rat serum and hepatocyte growth factor (HGF) in vitro. Methods Myeloid cellsof femur and tibia were collected from the female healthy Wistar rats at the age of 6 weeks, the BMSCs were isolated, purified and identified. Normal and cholestatic rat serum were prepared from 40 healthy Wistar rats at the age of 12-14 weeks. The 3rd passage of BMSCs were harvested and added different cultures according to the following grouping: group A, DMEM plus 10%FBS; group B, hepatocyte growth medium (HGM) plus 5%FBS; group C, HGM plus 5% normal rat serum; group D, HGM plus 5% cholestatic rat serum; group E, HGM plus 5% cholestatic rat serum plus 25 μg/L HGF. The changes of cell morphology were observed, MTT assay was used to measure cell growth; the expression of alpha-fetoprotein (AFP) and cytokeratin 18 (CK18) were detected by immunocytochemistry; the glycogen deposit was examined by periodic acid-schiff (PAS) staining; and the urea content in culture supernatant was determined by glutamate dehydrogenase. Results Polygonal cells and binuclear cells were observed in groups D and E, while the shapes of cells in groups A, B, and C did not obviously change. The cell growth curve demonstrated that the speed of cells proliferation in group C was the fastest, the one in group B was the slowest; showing significant differences when compared with groups A, D, and E (P lt; 0.05). On the 7th day in groups D and E, the positive expressions of AFP and CK18 emerged, on the 14th day the positive expression of glycogen emerged. At the same period, the expression ratio was higherin group E than in group D (P lt; 0.05). The urea concentration increased gradually with induction time in groups D and E, the concentration was higher in group E than in group D (P lt; 0.05). No expressions of AFP, CK18, glycogen, and change of the urea concentration were observed in groups A, B, and C. Conclusion Normal rat serum can obviously promote the growth of BMSCs; cholestatic rat serum which promote the growth of BMSCs can induce to differentiate into hepatocyte; and a combination of cholestatic serum and HGF can increase the differentiation ratio.