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It is still a matter of debate as to whether in vitro mesenchymal stem cell (MSC)-derived hepatocytes may efficiently repopulate a host liver to provide adequate functional substitution. The aim of this study is to assess the efficacy and consistency of in vitro hepatic differentiation from Wharton jelly–derived MSCs, and to validate their therapeutic potential in experimentally induced liver fibrosis compared with nondifferentiated MSCs. Forty adult male albino rats were divided into 4 main groups: (I) normal control group; (II) carbon tetrachloride (CCl4)-treated group (injected CCl4 solution twice a week for 8 wk); (III) MSC-treated group (a single intravenous dose of MSCs from human umbilical cord at the fourth week of induction of fibrosis); and (IV) hepatocyte-like stem cells (HLCs)-treated group (a single intravenous dose of MSCs after in vitro conversion to hepatocyte at the fourth week of induction of fibrosis). Portal blood flow velocity and resistance, serum alanine transaminase, aspartate transaminase, albumin, and total bilirubin were measured. Liver homogenate was prepared for malondialdehyde, superoxide dismutase (SOD), nitric oxide (measured as nitrites), and TGFβ (transforming growth factor beta) assessment. Assessment of human cells homing into liver rat and their function was performed using immunohistochemistry for detection of human hepatocytes and α-fetoprotein antigens. Significant elevation of serum alanine transaminase, aspartate transaminase, and bilirubin, liver malondialdehyde, nitrites, TGFβ, fibrotic score, and significant reduction in serum albumin, liver SOD, and portal flow velocity in the CCl4-treated group were found when compared with normal rats. All these parameters significantly reversed in MSC-treated and hepatocyte-treated groups when compared with the CCl4-treated group. The MSC-treated group shows statistically better results in most liver function and oxidation parameters when compared with the HLC-treated group. Human MSCs can differentiate in vitro into functional HLCs. Transplantation of both MSCs and HLCs was feasible and effective in a liver fibrosis rat model. However, MSCs were better in regaining liver function. Future studies should address strategies to improve long-term implantation of MSCs and HLCs in the host liver.