Induced pluripotent stem (iPS) cells are pluripotent and are able to unlimitedly proliferate in vitro. This technical breakthrough in creating iPS cells from somatic cells has noteworthy implications for overcoming the immunological rejection and the ethical issues associated with the derivation of embryonic stem cells from embryos. In the current work, we present an efficient hepatic differentiation of mouse iPS cells in vitro. iPS cells were cultured free floating to induce the formation of embryoid bodies (EB) for 5 days. EB were transferred to a gelatin-coated plate and treated with 100 ng/ml activin A and 100 ng/ml basic fibroblast growth factor (bFGF) for 3 days to induce definitive endoderm. Cells were further cultured for 8 days with 100 ng/ml hepatocyte growth factor (HGF) to generate hepatocytes. Characterization was performed by RT-PCR assay. Functional analysis for albumin secretion and ammonia removal was also carried out. iPS cell-derived hepatocyte-like cells (iPS-Heps) were obtained at the end of the differentiation program. Expression levels of a gestational hepatocyte gene and lineage-specific hepatic genes intensified in iPS-Heps. The production of albumin increased in a time-dependent manner. iPS-Heps were capable of metabolizing ammonia. We present here instant hepatic differentiation of mouse iPS cells using combined 3-day treatments of activin A and bFGF with subsequent 8-day HGF. Our study will be an important step to generate hepatocytes from human iPS cells as a new source for liver-targeted cell therapies.