Hepatocytes undergo distinct phases of differentiation as they arise from the gut endoderm, coalesce to form the liver, and mature by birth. Gene inactivation and in vivo footprinting studies in mouse embryos have identified regulatory transcription factors and cell signaling molecules that control some but not all of these transitions. The latest studies reveal DNA-binding proteins that appear to potentiate gene activation during liver specification and the importance of signals between early hepatocytes and other cell types that promote early liver growth.