Proliferation and differentiation of hepatic stem cell progenies (i.e., oval cells) sustain liver regeneration when the replicative and functional capacity of hepatocytes is impaired. The signaling pathways that control stem cell activation remain poorly understood. In this study, we investigated the involvement of nuclear factor‐kappa B (NF‐κB) and signal transducer and activator of transcription 3 (STAT3) in oval cell‐mediated liver regeneration induced by 2‐acetylaminofluorene/partial hepatectomy (AAF/PH) protocol. Using OV1 as a marker for identification and sorting of oval cells, we established that both NF‐κB and STAT3 were highly activated in the OV1⁺ cell population. Three distinct subpopulations of oval cells were defined as OV1^low, OV1^medium, and OV1^high, based on the intensity of OV1 staining. Quantitative polymerase chain reaction analysis revealed that they represent different stages of oval cell differentiation along hepatocyte lineage. OV1^low cells displayed the least differentiated phenotype as judged by high expression of c‐kit and lack of hepatocytic differentiation markers, whereas OV1^high cells lost c‐kit expression, were more proliferative, and acquired more mature hepatocytic phenotype. Notably, NF‐κB was activated uniformly in all three subpopulations of oval cells. In contrast, phosphorylation of STAT3 was detected only in OV1^high cells. In conclusion, transcriptional activity supported by NF‐κB and STAT3 is required for oval cell activation, expansion, and differentiation. The differential induction of NF‐κB and STAT3 point to a distinct role for these transcription factors at different stages of hepatic stem cell differentiation. (HEPATOLOGY 2004;39:376–385.)