Early reports indicated cell engraftment from bone marrow transplants into non- hematopoietic tissues in mouse to mouse and in human allogeneic bone marrow transplants. To investigate the developmental potential of human stem cells I used xenotransplantation of stem cells purified from cord blood into a mouse model. Human stem cells introduced into the NOD/Scid mouse after partial myeloablation repopulate the bone marrow and contribute to the hematopoietic system of the mouse. Engraftment into the bone marrow was measured by FACS and human genetic material was found in the spleen, skin, lung and liver. Engraftment in the liver was studied with a variety of methods, ranging from PCR based assays to FISH analysis and immunohistochemistry. To allow better identification of human cells transduction with a lentivirus carrying the GFP gene was used. Liver damage has been suggested as one of the factors influencing homing of stem cells to the liver and transdifferentiation of bone marrow cells into hepatocytes. To assess the role of tissue damage a model of severe liver injury induced by CCU was utilised. Two stages of damage might be important in this context, damage during the process of homing, and damage during transdifferentiation both of which were studied. I demonstrate that stem cell homing to the liver is significantly increased upon liver injury. Human albumin and a-anti-trypsin messenger RNA is expressed in the livers of some animals by RT-PCR and large GFP positive hepatocytes and hepatocytes staining with HepPar-1, thought to be specific for human hepatocytes, are present. However, transdifferentiation defined as the emergence of mature human hepatocytes after bone marrow transplantation could not be found. A variety of methods used to determine the genetic identity in GFP positive hepatocytes only identified remnants of the human genome. In addition to small amounts of human DNA the murine Y chromosome and the murine TNFa locus were readily detected in these hepatocytes. I conclude that transdifferentiation of human stem cells to a mature hepatocyte phenotype does not occur in the NOD/Scid model of bone marrow transplantation even after severe CCU induced liver damage. Instead human cells most probably of haematopoietic origin fuse with resident hepatocytes to give rise to mixed heterokaryons expressing some, but not all markers of human hepatocytes. To achieve true transdifferentiation a different, more chronic type of tissue damage, or a better defined stem cell population might be required