Hepatic progenitor cells (called oval cells in rodents) proliferate during chronic liver injury. They have been suggested as targets of malignant transformation in chronic liver diseases, including chronic hepatitis C. Interferon alpha therapy reduces the risk of hepatocellular carcinoma (HCC) in chronic hepatitis C regardless of viral clearance. The aim of this study was to determine whether interferon alpha could reduce the risk of HCC by modifying preneoplastic events in the hepatic progenitor cell population. Pre- and post-treatment liver biopsies were evaluated for changes in t he hepaticprogenitor cell population in 16 patients with non-responding chronic hepatitis C Interferon alpha-based treatment significantly reduced the numbers of c-kit-positive hepatic progenitor cells by 50%. To determine the mechanism of cell number reduction, the effects of interferon alpha on murinehepatic progenitor cells were studied in vitro. MTT (3-(4,5-dimethylthiazol-2-yl)-2,5-diphenyltetrazolium bromide) proliferation assay and proliferating cell nuclear antigen staining showed that interferon alpha had a dose-dependent, anti-proliferative effect Interferon alpha stimulated hepatocytic and biliary differentiation of the oval cell lines reflected by increased expression of albumin and cytokeratin19 accompanied by decreased expression of alphafetoprotein and Thy-1. To validatethese results in vivo, mice were placed on the choline-deficient, ethionine-supplemented diet to induce liver injury and oval cell proliferation and treated with pegylated interferon alpha 2b for 2 weeks. This resulted in a significant four-fold reduction in the number of oval cells (P < .05). In conclusion, interferon alpha-based treatment reduced the number of hepatic progenitor cells in chronic liver injury by modulating apoptosis, proliferation, and differentiation. Supplementay material for this article can