A method for inducing hepatic differentiation comprising; (i) providing a population of induced pluripotent stem (iPS) cells, optionally human iPS cells, (ii) culturing the population to produce a population of anterior definitive endoderm cells, wherein said culturing comprises; (a) culturing the population in a endoderm induction medium; wherein the endoderm induction medium is a chemically defined medium which comprises fibroblast growth factor; a TGFβ ligand which stimulates SMAD2 and SMAD3 mediated signalling pathways; bone morphogenic protein; a phosphatidylinositol 3-kinase (PI3K) inhibitor and a glycogen synthase kinase 3β (GSK3β) inhibitor; (b) further culturing the population in a second endoderm induction medium, wherein the second endoderm induction medium is a chemically defined medium which comprises fibroblast growth factor; a TGFβ ligand which stimulates SMAD2 and SMAD3 mediated signalling pathways; bone morphogenic protein; and a phosphatidylinositol 3-kinase (PI3K) inhibitor and lacks glycogen synthase kinase 3β (GSK3β) inhibitor; and (c) further culturing the population in ADE induction medium which comprises a TGFβ ligand which stimulates SMAD2 and SMAD3 signalling pathways and fibroblast growth factor to produce the population of anterior definitive endoderm cells, and, (iii) culturing the population of ADE cells in a hepatic induction medium to produce a population of hepatic progenitor cells, wherein the hepatic induction medium is a chemically defined medium which comprises a TGFβ ligand which stimulates SMAD2 and SMAD3 mediated signalling pathways. (i) providing a population of induced pluripotent stem (iPS) cells, optionally human iPS cells, (ii) culturing the population to produce a population of anterior definitive endoderm cells, wherein said culturing comprises; (a) culturing the population in a endoderm induction medium; wherein the endoderm induction medium is a chemically defined medium which comprises fibroblast growth factor; a TGFβ ligand which stimulates SMAD2 and SMAD3 mediated signalling pathways; bone morphogenic protein; a phosphatidylinositol 3-kinase (PI3K) inhibitor and a glycogen synthase kinase 3β (GSK3β) inhibitor; (b) further culturing the population in a second endoderm induction medium, wherein the second endoderm induction medium is a chemically defined medium which comprises fibroblast growth factor; a TGFβ ligand which stimulates SMAD2 and SMAD3 mediated signalling pathways; bone morphogenic protein; and a phosphatidylinositol 3-kinase (PI3K) inhibitor and lacks glycogen synthase kinase 3β (GSK3β) inhibitor; and (c) further culturing the population in ADE induction medium which comprises a TGFβ ligand which stimulates SMAD2 and SMAD3 signalling pathways and fibroblast growth factor to produce the population of anterior definitive endoderm cells, and, (a) culturing the population in a endoderm induction medium; wherein the endoderm induction medium is a chemically defined medium which comprises fibroblast growth factor; a TGFβ ligand which stimulates SMAD2 and SMAD3 mediated signalling pathways; bone morphogenic protein; a phosphatidylinositol 3-kinase (PI3K) inhibitor and a glycogen synthase kinase 3β (GSK3β) inhibitor; (b) further culturing the population in a second endoderm induction medium, wherein the second endoderm induction medium is a chemically defined medium which comprises fibroblast growth factor; a TGFβ ligand which stimulates SMAD2 and SMAD3 mediated signalling pathways; bone morphogenic protein; and a phosphatidylinositol 3-kinase (PI3K) inhibitor and lacks glycogen synthase kinase 3β (GSK3β) inhibitor; and (c) further culturing the population in ADE induction medium which comprises a TGFβ ligand which stimulates SMAD2 and SMAD3 signalling pathways and fibroblast growth factor to produce the population of anterior definitive endoderm cells, and, (iii) culturing the population of ADE cells in a hepatic induction medium to produce a population of hepatic progenitor cells, wherein the hepatic induction medium is a chemically defined medium which comprises a TGFβ ligand which stimulates SMAD2 and SMAD3 mediated signalling pathways.