Hepatoblasts are common progenitors for hepatocytes and biliary epithelial cells, although their nature remains largely unknown. In order to isolate and to characterize hepatoblasts, we searched for cell surface antigens expressed in mouse fetal hepatic cells by the signal sequence trap method and found that Dlk, also known as Pref-1, was strongly expressed in fetal liver. Immunohistochemical as well as northern analysis indicated that Dlk was highly expressed in the E10.5 liver bud. The strong expression continued until the E16.5 stage and was significantly downregulated thereafter. Using a monoclonal antibody against Dlk, we isolated Dlk⁺ cells either by a fluorescence-activated cell sorter or by an automatic magnetic cell sorter. Dlk⁺ cells isolated from fetal livers expressed albumin and formed colonies when cultured at low density with HGF and EGF for 5 days. Over 60% of colonies derived from E14.5 Dlk⁺ cells contained both albumin⁺ and cytokeratin 19⁺ cells, indicating that a majority of colony-forming Dlk⁺ cells are able to differentiate into both hepatocyte and biliary epithelial cell lineages. In addition,numerous microvilli were observed by electronmicroscopic analysis in most of those cultured cells, also indicating differentiation of Dlk⁺ cells under this condition. Furthermore, 7% of the colony-forming Dlk⁺cells were not only bipotential but also highly proliferative, forming a large colony containing more than 100 cells during 5 days of culture. By transplantation of Dlk⁺ cells into the spleen, donor-derived hepatocytes were found in the recipient liver, indicating that Dlk⁺cells differentiated into hepatocytes in vivo. These results indicate that Dlk⁺ cells are hepatoblasts and that Dlk is a useful marker to enrich highly proliferative hepatoblasts from fetal liver.