Primary liver cancer is the second leading cause of cancer-related death worldwide. Primary liver cancer includes: Hepatocellular carcinoma (HCC), intrahepatic cholangiocarcinoma (ICC) and a mixed HCC-ICC tumor. Preceding the development of primary liver cancer, there is usually a prolonged period of chronic inflammation that leads to cirrhosis. It has been proposed that hepatic progenitor cells (HPCs) could contribute to hepatocarcinogenesis. However, this was not proven. These cells proliferate in response to injury and chronic inflammation in the liver. Although stem cells residing in highly proliferative tissues, such as skin, are essential for sustaining normal tissue homeostasis, their contribution in quiescent tissues, such as liver, is still a matter of debate. In this study, we aimed to determine whether HPCs contribute to liver cancer development in the MDR2 KO mouse model of inflammation-induced HCC. In order to enable tracing of progenitor cells, we generated a transgenic mouse based on the MDR2 KO that harbors a YFP reporter gene driven by the Foxl1 promoter, the promoter of a liver progenitor specific marker. These mice (MDR2 KOFoxl1CRE; RosaYFP) develop chronic inflammation by the age of 1 months and HCC by the age of 16 months and mixed HCC-ICC by the age of 18 months. Using immunofluorescence we show that HPCs are present in the chronically inflamed livers and within dysplastic nodules at the age of a year and later. At the age of 3 months, upon severe inflammation, YFP positive progenitor cells proliferate and also differentiate, giving rise to both cholangiocytes and hepatocytes. Analysis of livers of 16-month MDR2 KOFoxl1CRE ;RosaYFP revealed that only a minority of dysplastic nodules were positive for YFP expression. Furthermore, HCC tumors were YFP negative, containing only scattered YFP-positive HPCs, which did not exhibit hepatocyte-like morphology that expressed cancer stem-like cells (CSCs) markers. At late stages of the MDR2 KO model (18-month) these mice developed ICC and HCC-ICC mixed tumors. Surprisingly, the cholangiocytes in tumour cells were YFP positive, implying that they were derived from HPCs. The HCC-ICC YFP positive tumors accounted for 30% of the total tumors observed. Additionally, the YFP cells in the tumors expressed stem cell-like markers including: Epcam, Cd24a and Krt19. These findings recapitulate the characteristics of human ICC-HCC tumors which also have stem cell like features. Taken together, our results suggest that HPCs may not be the origin for HCC but may be the origin for the mixed type HCC-ICC tumors in a chronic inflamed liver model.