Despite extensive studies, the hematopoietic versus hepatic origin of liver progenitor oval cells remains controversial. The aim of this study was to determine the origin of such cells after liver injury and to establish an oval cell line. Rat liver injury was induced by subcutaneous insertion of 2-AAF pellets for 7 days with subsequent injection of CCl(4). Livers were removed 9 to 13 days post-CCl(4) treatment. Immunohistochemistry was performed using anti-c-kit, OV6, Thy1, CK19, AFP, vWF and Rab3b. Isolated non-parenchymal cells were grown on mouse embryonic fibroblast, and their gene expression profile was characterized by RT-PCR. We identified a subpopulation of OV6/CK19/Rab3b-expressing cells that was activated in the periportal region of traumatized livers. We also characterized a second subpopulation that expressed the HSCs marker c-kit but not Thy1. Although we successfully isolated both cell types, OV6/CK19/Rab3b(+) cells fail to propagate while c-kit(+)-HSCs appeared to proliferate for up to 7 weeks. Cells formed clusters which expressed c-kit, Thy1 and albumin. Our results indicate that a bona fide oval progenitor cell population resides within the liver and is distinct from c-kit(+)-HSCs. Oval cells require the hepatic niche to proliferate, while cells mobilized from the circulation proliferate and transdifferentiate into hepatocytes without evidence of cell fusion.