Hepatic stem cells are activated after liver damage and have a critical role in tissue homeostasis and repair. Characterization of molecular and cellular events accompanying the expansion and differentiation of liver stem cells is essential for understanding the basic biology of stem cells and for facilitating clinical application of the stem cells. We assessed whether in vitro differentiation of putative hepatic progenitor (rat liver epithelial [RLE]) cells toward hepatocytic lineage affects the response to TNFα‐mediated cytotoxicity, a common determinant of liver injury. The data show that 50% of differentiated cells underwent apoptosis after 6 hours of TNFα treatment whereas control RLE cells were resistant. Both cell types displayed mitochondrial depolarization and release of cytochrome c but the TNFα treatment resulted in activation of caspases 9 and 3 and the execution of apoptosis only in differentiated RLE cells. Apoptotic death was associated with increased ROS production and depletion of glutathione. Antioxidants completely prevented both glutathione depletion and apoptosis induced by TNFα in differentiated RLE cells. Conversely, glutathione‐depleting agents sensitized control RLE cells to TNFα induced apoptosis. In conclusion, efficient antioxidant defense system involving glutathione renders hepatic progenitor cells resistant to TNFα‐mediated apoptosis and acquisition of sensitivity to death stimuli is an implicit feature of the differentiation process. Supplementary material for this article can be found on the HEPATOLOGY website (http://interscience.wiley.com/jpages/0270‐9139/suppmat/index.html). (HEPATOLOGY 2004;40:590–599.)