Liver progenitor cells (LPCs) have enormous potential to repair the liver. They represent a means of using cell therapy as an alternative to liver transplant for treating some forms of liver disease. The significant advantages afforded by LPCs both in the context of ex vivo and in vivo approaches will be discussed. Our knowledge of how LPCs respond to inflammatory cells and their cytokines allow us to grow and differentiate them to suit specific needs. They can be cultured, then transplanted into mice, either directly into the liver or housed in bioartificial devices. In either situation they generate functional hepatocytes. More recently, we addressed the question of whether the immune system can be manipulated to modulate the LPC response in vivo thereby enhancing its contribution to liver repair. Adoptive transfer of bone marrow-derived monocytes enhances the LPC response. In contrast, we are able to suppress the LPC response when macrophages are ablated by clodronate administration. The relationship between liver damage, inflammation and the LPC response will be discussed.