AIM: To explore the feasibility of passage of bonemarrow-derived liver stem cells (BDLSCs) in culture systems that contain cholestatic serum. METHODS: Whole bone marrow cells of rats were purified with conditioning selection media that contained 50 mL/L cholestatic serum. The selected BDLSCs were grown in a proliferating culture system and a differentiating culture system. The culture systems contained factors that stimulated the proliferation and differentiation of BDLSCs. Each passage of the proliferated stem cells was subjected to flow cytometry to detect stem cell markers. The morphology and phenotypic markers of BDLSCs were characterized using immunohistochemistry, reverse transcription polymerase chain reaction (RT-PCR) and electron microscopy. The metabolic functions of differentiated cells were also determined by glycogen staining and urea assay. RESULTS: The conditioning selection medium isolated BDLSCs directly from cultured bone marrow cells. The selected BDLSCs could be proliferated for six passages and maintained stable markers in our proliferating system. When the culture system was changed to a differentiating system, hepatocyte-like colony-forming units (H-CFUs) were formed. H-CFUs expressed markers of embryonic hepatocytes (alpha-fetoprotein, albumin and cytokeratin 8/18), biliary cells (cytokeratin 19), hepatocyte functional proteins (transthyretin and cytochrome P450-2b1), and hepatocyte nuclear factors 1α and -3β). They also had glycogen storage and urea synthesis functions, two of the critical features of hepatocytes. CONCLUSION: BDLSCs can be selected directly from bone marrow cells, and pure BDLSCs can be proliferated for six passages. The differentiated cells have hepatocyte-like phenotypes and functions. BDLSCs represent a new method to provide a readily available altate source of cells for clinical hepatocyte therapy.