The strictly regulated unidirectional differentiation program in some somatic stem/progenitor cells has been found to be modified in the ectopic site (tissue) undergoing regeneration. In these cases, the lineage barrier is crossed by either heterotypic cell fusion or direct differentiation. Though studies have shown the role of coordinated genetic and epigenetic mechanisms in cellular development and differentiation, how the lineage fate of adult bone marrow progenitor cells (BMPCs) is reprogrammed during liver regeneration and whether this lineage switch is stably maintained are not clearly understood. In the present study, we wanted to decipher genetic and epigenetic mechanisms that involve in lineage reprogramming of BMPCs into hepatocyte-like cells. Here we report dynamic transcriptional change during cellular reprogramming of BMPCs to hepatocytes and dissect the epigenetic switch mechanism of BM cell-mediated liver regeneration after acute injury. Genome-wide gene expression analysis in BM-derived hepatocytes, isolated after 1 month and 5 months of transplantation, showed induction of hepatic transcriptional program and diminishing of donor signatures over the time. The transcriptional reprogramming of BM-derived cells was found to be the result of enrichment of activating marks (H3K4me3 and H3K9Ac) and loss of repressive marks (H3K27me3 and H3K9me3) at the promoters of hepatic transcription factors (HTFs). Further analyses showed that BMPCs possess bivalent histone marks (H3K4me3 and H3K27me3) at the promoters of crucial HTFs. H3K27 methylation dynamics at the HTFs was antagonistically regulated by EZH2 and JMJD3. Preliminary evidence suggests a role of JMJD3 in removal of H3K27me3 mark from promoters of HTFs, thus activating epigenetically poised hepatic genes in BMPCs prior to partial nuclear reprogramming. The importance of JMJD3 in reprogramming of BMPCs to hepatic phenotype was confirmed by inhibiting catalytic function of the enzyme using small molecule GSK-J4. Our results propose a potential role of JMJD3 in lineage conversion of BM cells into hepatic lineage.