Oval cells have great potential for use in cell therapy to treat liver disease, however this cannot be achieved until the factors which govern their proliferation and differentiation are better understood. We describe a method to establish primary cultures of murine oval cells, and the derivation of two novel lines from these. Primary cultures from the livers of wildtype or TAT-GRE lacZ transgenic mice subjected to a choline-deficient, ethionine-supplemented diet comprised up to 80% oval cells at day 7 based on A6 or CK19 staining. Cell lines were clonally derived, which underwent spontaneous immortalisation following prolonged maintenance in culture. Immunostaining and RT-PCR demonstrated they express hepatocytic and biliary markers and they were therefore termed "bipotential murine oval liver" (BMOL) cells. Under proliferating culture conditions, BMOL or BMOL-TAT cells abundantly expressed oval cell and biliary markers, whereas mature hepatocytic markers were upregulated when the growth conditions were changed to facilitate differentiation. Hepatic differentiation of BMOL-TAT cells could be traced by measuring the expression of their lacZ transgene, which is driven by a promoter element from tyrosine aminotransferase (TAT), a marker of adult hepatocytes. Interestingly, haematopoietic markers were upregulated in superconfluent cultures, indicating a possible multipotentiality. None of the cell lines grew in semi-solid agar, nor did they form tumours in nude mice, suggesting they are non-tumourigenic. These novel murine oval cell lines, together with a reliable method for isolation and culture of primary oval cells, will provide a useful tool for investigating the contribution of oval cells to liver regeneration.