The potential to differentiate human embryonic stem cells (hESCs) in vitro to provide an unlimited source of human hepatocytes for use in biomedical research, drug discovery, and the treatment of liver diseases holds great promise. Here we describe a three-stage process for the efficient and reproducible differentiation of hESCs to hepatocytes by priming hESCs towards definitive endoderm with activin A and sodium butyrate prior to further differentiation to hepatocytes with dimethyl sulfoxide, followed by maturation with hepatocyte growth factor and oncostatin M. We have demonstrated that differentiation of hESCs in this process recapitulates liver development in vivo: following initial differentiation, hESCs transiently express characteris...