MMH (Met murine hepatocyte) liver cells derived from transgenic mice expressing a truncated constitutively active form of human c-Met are non-transformed immortalized cell lines. We have previously shown that they harbor: (1) epithelial cells that express the liver-enriched transcription factors HNF4 and HNF1α, and that can be stably induced by FGF1 to express liver functions, and (2) fibroblast-like bi-potential palmate cells that can differentiate into bile duct-like structures in Matrigel cultures, or into epithelial cells competent to express hepatic functions. Low concentrations of TGFβ have been found to inhibit growth and differentiation of MMH cells. The factor stabilized the palmate cell phenotype, and it provoked epithelial cells to acquire palmate-like morphological characteristics, in parallel with down-regulation of expression of HNF4 and HNF1α and activation of Snail transcripts. The effects of TGFβ were dominant if it was added with FGF1, but the effects on differentiation were abrogated if cells had been pre-treated with FGF1. This work identifies TGFβ as a factor that could be implicated in maintaining bi-potential precursor cells in the liver, FGF1 as one that could over-ride the TGFβ effects and Snail as a candidate for mediation of the signal.