Extensive cell-cell or cell-matrix interaction in three-dimensional (3D) culture is important for the maintenance of adult hepatocyte function and the maturation of hepatic progenitors. However, although there is significant interest in inducing the transdifferentiation of adult stem cells into the hepatic lineage, very few studies have been conducted in a 3D culture configuration. The aim of this study is to investigate the differentiation of mesenchymal stem cells (MSC) into hepatocytes in a pellet configuration, with or without the presence of small intestinal submucosa (SIS). After 4 weeks of differentiation with growth factors bFGF, HGF, and OsM, we obtained hepatocyte-like cells that expressed a subset of hepatic genes, secreted albumin and urea, stored glycogen, and showed inducible CYP3A4 mRNA levels. When these cells were implanted into livers of hepatectomized rats, they secreted human albumin into the bloodstream. The hepatic differentiation of MSC was faster in cell pellets without SIS. The plausible explanations for this finding may be related to the mass transport issues of the two different pellets and the role of cell-cell contact over cell-matrix interactions. The findings of this study should help in the design of optimal culture configurations for efficient hepatic differentiation of adult stem cells.