Hepatogenesis means the formation of liver tissue. The development of mouse liver is induced by cardiac mesoderm at 7-8 somite stage when the hepatic diverticulum emerges from foregut endoderm. Following this induction, hepatic progenitors emerge from the foregut endodermal tissue, where they mature. Once the liver bud emerges from developing gut, hematopoietic cells migrate (E9-E10) there from aortagonad mesonephros (AGM), proliferate and apparently produce liver morphogenic and growth factors till the end of the fetal liver hematopoiesis at about E16. Thus, a close relationship between endodermal and mesodermal tissue components in the fetal liver is expected. Experiments using explants and primary culture of hepatic precursors (hepatoblasts), isolated from the liver at later stages of development, support biopotential DIFFERENTIATION ability and their endodermal origin.For the first time, Lipp show that about 80% of the liver parenchyma originates from mesoderm tissue. The argument in favor of possible involvement of hematopoietic cells in development of liver has become stronger after knowing the phenotypic similarities between hematopoietic stem cells (HSCs) and the liver stem cells, also known as oval cells. Moreover, recent reports showed that bone marrow-derived cells can directly differentiate into hepatocytes in mice liver injury model. Human HSCs are also shown to differentiate into hepatocytes in pre-immune fetal sheep by in utero transplantation. In recent past, we have shown that a sub-population of E10.5 fetal liver hematopoietic cells serves as progenitor of hepatocytes. This result probably suggests developmental plasticity in hematopoietic cells at fetal stage.