Terminally differentiated cells can be generated by lineage reprogramming, which is, however, hindered by incomplete conversion with residual initial cell identity and partial functionality. Here, we demonstrate a new reprogramming strategy by mimicking the natural regeneration route, which permits generating expandable hepatic progenitor cells and functionally competent human hepatocytes. Fibroblasts were first induced into human hepatic progenitor-like cells (hHPLCs), which could robustly expand in vitro and efficiently engraft in vivo. Moreover, hHPLCs could be efficiently induced into mature human hepatocytes (hiHeps) in vitro, whose molecular identity highly resembles primary human hepatocytes (PHHs). Most importantly, hiHeps could be generated in large quantity and were functionally competent to replace PHHs for drug-metabolism estimation, toxicity prediction and hepatitis B virus infection modeling. Our results highlight the advantages of the progenitor stage for successful lineage reprogramming. This strategy is promising for generating other mature human cell types by lineage reprogramming.