Cirrhosis and hepatocellular carcinoma (HCC), end stages of all chronic liver diseases, are characterized by expansion of small immature cholangiocytes – a mechanism named ductular reaction (DR). DR cells are believed to be progenitors able to differentiate in cholangiocytes or in hepatocytes. We lack evidence of the fate and role of the DR during chronic liver disease. We demonstrated here that DR cells adapt their phenotype accordingly to the liver injury: in severe hepatocellular damage, DR cells expand as biliary epithelium and establish new duct-canaliculi junctions favoring the drainage of bile; in the chronic fibrotic liver, DR cells differentiate into hepatocytes refueling the liver parenchyma with young and strong hepatocytes. Also, DR cells do not give rise to HCC and DR-derived hepatocytes are less susceptible to carcinogenesis than native ones. Thus, DR cells can be considered an ally for liver regeneration and its in vivo stimulation may salvage liver failure.