The sarcomatoid cells found in cholangiocarcinoma (CC) or hepatocellular carcinoma (HCC) are not well characterized. In this study, a human sarcomatoid CC cell line, ETK-1, was established from a patient, and then morphological and phenotypical characteristics of the ETK-1 cells were evaluated before and after treatment with differentiation-inducing 5-azacytidine (5-azaCR). Phenotypically, the ETK-1 cells appeared immature. Exposure to 5-azaCR induced morphological transformation; a converted cell line, MEK, was successfully established. The MEK cells expressed such hepatocyte-specific proteins as alpha-fetoprotein, albumin, integrin alpha1, and thrombopoietin, but lost such bile duct-specific proteins as integrin alpha3 and integrin beta4. The histopathology of MEK xenografts resembled that of HCC. The ETK-1 cells appeared to be converted into hepatocytes by exposure to 5-azaCR. On the other hand, ETK-1 xenografts were diagnosed as tubular adenocarcinoma, and the tumor cells had a ductal phenotype. This suggests the possibility that ETK-1 cells can differentiate along a biliary epithelial cell lineage. ETK-1 and MEK will be useful in studying hepatocytic differentiation and the transformation from a biliary epithelial cell to a hepatocytic lineage.