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Hepatocellular carcinoma (HCC) is driven by repeated rounds of inflammation, leading to fibrosis, cirrhosis, and, ultimately, cancer. A critical step in HCC formation is the transition from fibrosis to cirrhosis, which is associated with a change in the liver parenchyma called ductular reaction. Here, we report a genetically engineered mouse model of HCC driven by loss of macroautophagy and hemizygosity of phosphatase and tensin homolog, which develops HCC involving ductular reaction. We show through lineage tracing that, following loss of autophagy, mature hepatocytes dedifferentiate into biliary-like liver progenitor cells (ductular reaction), giving rise to HCC. Furthermore, this change is associated with deregulation of yes-associated protein and transcriptional coactivator with PDZ-binding motif transcription factors, and the combined, but not individual, deletion of these factors completely reverses the dedifferentiation capacity and tumorigenesis. These findings therefore increase our understanding of the cell of origin of HCC development and highlight new potential points for therapeutic intervention., (Copyright © 2021 The Authors, some rights reserved; exclusive licensee American Association for the Advancement of Science. No claim to original U.S. Government Works. Distributed under a Creative Commons Attribution License 4.0 (CC BY).)