Abstract: Objective To establish a new method for inducing the primordial germ cells to differentiate into hepatocyte-like in vitro. Methods The primordial germ cells (PGCs) from the gonadal ridges of the mouse embryos at 13 days postcoitum from Kunming pregnant mice were cultured and proliferated in vitro. Then embryonic hepatocytes enclosed in microcapsule and liver tissue extract of newborn mice were added into medium to co-culture with PGCs for committed differentiation. Albumin (ALB) and α-1-antitrypsin (AAT) were assayed by immunocytochemistry. Results The morphology of cells differentiated from PGCs likes star or ovum, the ALB and AAT immune positive expression were detected in those differentiated cells. The ratio of positive cells was above 70% in 2 weeks. Conclusion Microenvironment of embryonic hepatocyte microcapsules and liver tissue extract could effectively induce PGCs to differentiate into hepatocytes.