Oncostatin M (OSM) is a multifunctional cellular regulator acting on a wide variety of cells, which has potential roles in the regulation of gene activation, cell survival, proliferation and differentiation. Previous studies have shown that OSM can induce morphological and/or functional differentiation and maturation of many tumor cells. However, the action of OSM on the induction of differentiation of human hepatocellular carcinoma (HCC) has not been reported. Here, we investigated the effects of different concentrations of OSM on human HCC cell line SMMC-7721 growth, proliferation, cell cycling, apoptosis and differentiation in vitro. Cell growth was determined via MTT assay, proliferation by cell cycle analysis, apoptosis by flow cytometry, morphology by transmission electronic microscopy, and cell function by detection of biochemical markers. Our results demonstrated that OSM strongly inhibited the growth of SMMC-7721 cells in a dose-dependent manner, associated with decreased clonogenicity. Cell cycle analysis revealed a decreased proportion of cells in S phase, with arrest at G0/G1. The apotosis rate was increased after OSM treatment compared to the control. These changes were associated with striking changes in cellular morphology, toward a more mature hepatic phenotype, accompanied by significant reduction of the expression of AFP and specific activity of ${gamma}$-GT, with remarkable increase in secretion of albumin and ALP activity. Taken together, our findings indicate that OSM could induce the differentiation and reduce cell viability of SMMC-7721 cells, suggesting that differentiation therapy with OSM offers the opportunity for therapeutic intervention in HCC.