The worldwide shortage of donor livers for organ and hepatocyte transplantation has prompted the search for alternative therapies for intractable liver diseases. Cell-based therapy is envisaged as a useful therapeutic option to recover and stabilize the lost metabolic function for acute liver failure, end-stage and congenital liver diseases, or for those patients who are not considered eligible for organ transplantation. In recent years, research to identify alternative and reliable cell sources for transplantation that can be derived by reproducible methods has been encouraged. Human pluripotent stem cells (PSCs), which comprise both embryonic and induced PSCs, may offer many advantages as an alternative to hepatocytes for liver cell therapy. Their capacity for expansion, hepatic differentiation and self-renewal make them a promising source of unlimited numbers of hepatocyte-like cells for treating and repairing damaged livers. Immunogenicity and tumorigenicity of human PSCs remain the bottleneck for successful clinical application. However, recent advances made to develop disease-corrected hepatocyte-like cells from patients' human-induced PSCs by gene editing have opened up many potential gateways for the autologous treatment of hereditary liver diseases, which may likely reduce the risk of rejection and the need for lifelong immunosuppression. Well-defined methods to reduce the expression of oncogenic genes in induced PSCs, including protocols for their complete and safe hepatic differentiation, should be established to minimize the tumorigenicity of transplanted cells. On top of this, such new strategies are currently being rigorously tested and validated in preclinical studies before they can be safely transferred to clinical practice with patients.