Immortalized human hepatocytes (IHH) could provide an unlimited supply of hepatocytes, but insufficient differentiation and phenotypic instability restrict their clinical application. This study aimed to determine the role of hepatocyte nuclear factor 4A (HNF4A) in hepatic differentiation of IHH, and whether encapsulation of IHH overexpressing HNF4A could improve liver function and survival in rats with acute liver failure (ALF). Primary human hepatocytes were transduced with lentivirus-mediated catalytic subunit of human telomerase reverse transcriptase (hTERT) to establish IHH. Cells were analyzed for telomerase activity, proliferative capacity, hepatocyte markers, and tumorigenicity (c-myc) expression. Hepatocyte markers, hepatocellular functions, and morphology were studied in the HNF4A-overexpressing IHH. Hepatocyte markers and karyotype analysis were completed in the primary hepatocytes using shRNA knockdown of HNF4A. Nuclear translocation of β-catenin was assessed. Rat models of ALF were treated with encapsulated IHH or HNF4A-overexpressing IHH. A HNF4A-positive IHH line was established, which was non-tumorigenic and conserved properties of primary hepatocytes. HNF4A overexpression significantly enhanced mRNA levels of genes related to hepatic differentiation in IHH. Urea levels were increased by the overexpression of HNF4A, as measured 24h after ammonium chloride addition, similar to that of primary hepatocytes. Chromosomal abnormalities were observed in primary hepatocytes transfected with HNF4A shRNA. HNF4α overexpression could significantly promote β-catenin activation. Transplantation of HNF4A overexpressing IHH resulted in better liver function and survival of rats with ALF compared with IHH. HNF4A improved hepatic differentiation of IHH. Transplantation of HNF4A-overexpressing IHH could improve the liver function and survival in a rat model of ALF. •Immortalized human hepatocytes (IHH) could provide an unlimited supply of hepatocytes.•Hepatocyte nuclear factor 4A (HNF4A) plays a role in hepatic differentiation.•HNF4A improved hepatic differentiation of IHH.•Transplantation of HNF4A-overexpressing IHH could improve liver function.