AIM: To investigate the different effects of mesenchymal stem cells (MSCs) and hematopoietic stem cells (HSCs) on hepatic differentiation. METHODS: MSCs from rat bone marrow were isolated and cultured by standard methods. HSCs from rat bone marrow were isolated and purified by magnetic activated cell sorting. Both cell subsets were induced. Morphology, RT-PCR and immunocytochemistry were used to identify the hepatic differentiation grade. RESULTS: MSCs exhibited round in shape after differentiation, instead of fibroblast-like morphology before differentiation. Albumin mRNA and protein were expressed positively in MSCs, without detection of alpha-fetoprotein (AFP). HSCs were polygonal in shape after differentiation. The expression of albumin signal decreased and AFP signal increased. The expression of CK18 was continuous in MSCs and HSCs both before and after induction. CONCLUSION: Both MSCs and HSCs have hepatic differentiation capabilities. However, their capabilities are not the same. MSCs can differentiate into mature hepatocyte-like cells, never expressing early hepatic specific genes, while Thy-1.1(+) cells are inclined to differentiate into hepatic stem cell-like cells, with an increasing AFP expression and a decreasing albumin signal. CK18 mRNA is positive in Thy-1.1(+) cells and MSCs, negative in Thy-1.1(-) cells. It seems that CK18 has some relationship with Thy-1.1 antigen, and CK18 may be a predictive marker of hepatic differentiation capability.