Although there have been numerous reports describing the isolation of liver progenitor cells from the adult liver, their exact origin has not been clearly defined; and the role played by mature hepatocytes as direct contributors to the hepatic progenitor cell pool has remained largely unknown. Here, we report strong evidence that mature hepatocytes in culture have the capacity to dedifferentiate into a population of adult liver progenitors without genetic or epigenetic manipulations. By using highly purified mature hepatocytes, which were obtained from untreated, healthy rat liver and labeled with fluorescent dye PKH2, we found that hepatocytes in culture gave rise to a population of PKH2-positive liver progenitor cells. These cells, liver-derived progenitor cells, which share phenotypic similarities with oval cells, were previously reported to be capable of forming mature hepatocytes, both in culture and in animals. Studies done at various time points during the course of dedifferentiation cultures revealed that hepatocytes rapidly transformed into liver progenitors within 1 week through a transient oval cell-like stage. This finding was supported by lineage-tracing studies involving double-transgenic AlbuminCreXRosa26 mice expressing β-galactosidase exclusively in hepatocytes. Cultures set up with hepatocytes obtained from these mice resulted in the generation of β-galactosidase-positive liver progenitor cells, demonstrating that they were a direct dedifferentiation product of mature hepatocytes. Additionally, these progenitors differentiated into hepatocytes in vivo when transplanted into rats that had undergone retrorsine pretreatment and partial hepatectomy. Conclusion: Our studies provide strong evidence for the unexpected plasticity of mature hepatocytes to dedifferentiate into progenitor cells in culture, and this may potentially have a significant effect on the treatment of liver diseases requiring liver or hepatocyte transplantation.