Stem cell-derived hepatocytes may be an alternative cell source to treat liver diseases or to be used for pharmacological purposes. We developed a protocol that mimics mammalian liver development, to differentiate cells with pluripotent characteristics to hepatocyte-like cells. The protocol supports the stepwise differentiation of human embryonic stem cells (ESC) to cells with characteristics of primitive streak (PS)/mesendoderm (ME)/definitive endoderm (DE), hepatoblasts, and finally cells with phenotypic and functional characteristics of hepatocytes. Remarkably, the same protocol can also differentiate rat multipotent adult progenitor cells (rMAPCs) to hepatocyte-like cells, even though rMAPC are isolated clonally from cultured rat bone marrow (BM) and have characteristics of primitive endoderm cells. A fraction of rMAPCs can be fated to cells expressing genes consistent with a PS/ME/DE phenotype, preceding the acquisition of phenotypic and functional characteristics of hepatocytes. Although the hepatocyte-like progeny derived from both cell types is mixed, between 10-20% of cells are developmentally consistent with late fetal hepatocytes that have attained synthetic, storage and detoxifying functions near those of adult hepatocytes. This differentiation protocol will be useful for generating hepatocyte-like cells from rodent and human stem cells, and to gain insight into the early stages of liver development.