Adult stem cells (ASCs) capable of self-renewal and differentiation confer the potential of tissues to regenerate damaged parts. Epigenetic regulation is essential for driving cell fate decisions by rapidly and reversibly modulating gene expression programs. However, it remains unclear how epigenetic factors elicit ASC-driven regeneration. In this paper, we report that an RNA interference screen against 205 chromatin regulators identified 12 proteins essential for ASC function and regeneration in planarians. Surprisingly, the HP1-like protein SMED–HP1-1 (HP1-1) specifically marked self-renewing, pluripotent ASCs, and HP1-1 depletion abrogated self-renewal and promoted differentiation. Upon injury, HP1-1 expression increased and elicited increased ASC expression of Mcm5 through functional association with the FACT (facilitates chromatin transcription) complex, which consequently triggered proliferation of ASCs and initiated blastema formation. Our observations uncover an epigenetic network underlying ASC regulation in planarians and reveal that an HP1 protein is a key chromatin factor controlling stem cell function. These results provide important insights into how epigenetic mechanisms orchestrate stem cell responses during tissue regeneration.