SummaryTumor heterogeneity is the substrate for tumor evolution and the linchpin of treatment resistance. Cancer cell heterogeneity is largely attributed to distinct genetic changes within each cell population. However, the widespread epigenome repatterning that characterizes most cancers is also highly heterogenous within tumors and could generate cells with diverse identities and malignant features. We show that high levels of the epigenetic regulator and oncogene, UHRF1, in zebrafish hepatocytes rapidly induced methylome disordering, loss of heterochromatin, and DNA damage, resulting in cell cycle arrest, senescence, and acquisition of stemness. Reducing UHRF1 expression transitions these cells from senescent to proliferation-competent. The expansion of these damaged cells results in hepatocellular carcinomas (HCC) that have immature cancer cells intermingled with fibroblasts, immune and senescent cells expressing high UHRF1 levels, which serve as reservoirs for new cancer cells. This defines a distinct and heterogenous HCC subtype resulting from epigenetic changes, stemness and senescence escape.