Currently, different techniques to expand human hepatocytes in vitro are being investigated to generate enough cells for liver-directed cell therapies. However, based on observations in fibroblasts and other cell types, telomere attrition limits the proliferative capacity of normal somatic cells. Therefore, we explored whether telomere-dependent replicative aging restricts the in vitro proliferation of human hepatocytes. Subpopulations of cells isolated from a neonatal liver and characterized as hepatocyte derived by RT-PCR and flow cytometry started to proliferate 5–7 days after plating and were termed proliferating human hepatocytes (PHH). Following retroviral-mediated transduction of the catalytic telomerase subunit, telomerase reverse transcriptase (hTERT), telomerase activity increased from almost undetectable levels to levels as high as in HepG2 and other telomerase-positive cell lines. As expected, untransduced PHH progressively lost telomeric repeats and arrested after 30–35 cell divisions with telomeres of less than 5 kilo bases. In comparison, telomerase-reconstituted PHH maintained elongated telomeres and continued to proliferate as shown by colorimetric assays and cell counts. In this study, telomere stabilization extended the proliferative capacity of in vitro proliferating human neonatal hepatocytes. Therefore, telomere attrition needs to be addressed when developing techniques to expand human hepatocytes.