Hepatocytes represent an important target for gene therapy and editing of single-gene disorders. In alpha-1 antitrypsin (AAT) deficiency, one missense mutation results in impaired secretion of AAT. In most patients, lung damage occurs due to a lack of AAT-mediated protection of lung elastin from neutrophil elastase. In some patients, accumulation of misfolded PiZ mutant AAT protein triggers hepatocyte injury, leading to inflammation and cirrhosis. We hypothesized that correcting the Z mutant defect in hepatocytes would confer a selective advantage for repopulation of hepatocytes within an intact liver. A human PiZ allele was crossed onto an immune-deficient (NSG) strain to create a recipient strain (NSG-PiZ) for human hepatocyte xenotransplantation. Results indicate that NSG-PiZ recipients support heightened engraftment of normal human primary hepatocytes as compared with NSG recipients. This model can therefore be used to test hepatocyte cell therapies for AATD, but more broadly it serves as a simple, highly reproducible liver xenograft model. Finally, a promoterless adeno-associated virus (AAV) vector, expressing a wild-type AAT and a synthetic miRNA to silence the endogenous allele, was integrated into the albumin locus. This gene-editing approach leads to a selective advantage of edited hepatocytes, by silencing the mutant protein and augmenting normal AAT production, and improvement of the liver pathology.