Adult organ regeneration occurs in many systems such as in liver, skin, intestine and heart, indicating that postnatal life is not a static or quiescent state but a dynamic and complex process. The liver is a spectacular organ, exhibiting high regenerative capacity crucial for homeostasis and tissue repair: injuries induced mechanically or chemically, can be completely restored. Regeneration involves extensive cell division, inflammation and extracellular matrix remodeling processes. At the molecular level, one of the key mediators of regeneration response is the secreted cytokine transforming growth factor-β (TGFβ). TGFβ is a profibrogenic and anti-proliferative protein with pleiotropic functions depending on the cellular context. In this review, we discuss the role of TGFβ in the development of the liver and in adult liver regeneration, with particular emphasis on its role in regulation of hepatocyte regeneration and in hepatic progenitor cell-induced regeneration. Finally, we give an overview of the current direction of liver research towards cell replacement therapies.