The irreversibility of developmental processes in mammalian cells has been challenged by rising evidence that de-differentiation of hepatocytes occurs in adult liver. However, whether reversibility exists in mesenchymal stromal cell (MSC)-derived hepatocytes (dHeps) remains elusive. In this study, we find that hepatogenic differentiation (HD) of MSCs is a reversible process and is modulated by DNA methyltransferases (DNMTs). DNMTs are regulated by transforming growth factor β1 (TGFβ1), which in turn controls hepatogenic differentiation and de-differentiation. In addition, a stepwise reduction in TGFβ1 concentrations in culture media increases DNMT1 and decreases DNMT3 in primary hepatocytes (Heps) and confers Heps with multi-differentiation potentials similarly to MSCs. Hepatic lineage reversibility of MSCs and lineage conversion of Heps are regulated by DNMTs in response to TGFβ1. This previously unrecognized TGFβ1-DNMTs-MSC-HD axis may further increase the understanding the normal and pathological processes in the liver, as well as functions of MSCs after transplantation to treat liver diseases.