Toll‐like receptor 4 (TLR4) which acts as a receptor for lipopolysaccharide (LPS) has been reported to be involved in carcinogenesis. However, the regulatory mechanism of it has not been elucidated. Herein, we demonstrate that TLR4 promotes the malignant growth of liver cancer stem cells. Mechanistically, TLR4 promotes the expression of histone‐lysine N‐methyltransferase (SUV39 h2) and increases the formation of trimethyl histone H3 lysine 9‐heterochromatin protein 1‐telomere repeat binding factor 2 (H3K9me3‐HP1‐TRF2) complex at the telomeric locus under mediation by long non coding RNA urothelial cancer‐associated 1 (CUDR). At the telomeric locus, this complex promotes binding of POT1, pPOT1, Exo1, pExo1, SNM1B and pSNM1B but prevents binding of CST/AAF to telomere, thus controlling telomere and maintaining telomere length. Furthermore, TLR4 enhances interaction between HP1α and DNA methyltransferase (DNMT3b), which limits RNA polymerase II deposition on the telomeric repeat‐containing RNA (TERRA) promoter region and its elongation, thus inhibiting transcription of TERRA. Ultimately, TLR4 enhances the telomerase activity by reducing the interplay between telomerase reverse transcriptase catalytic subunit (TERT) and TERRA. More importantly, our results reveal that tri‐complexes of HP1 isoforms (α, β and γ) are required for the oncogenic action of TLR4. This study elucidates a novel protection mechanism of TLR4 in liver cancer stem cells and suggests that TLR4 can be used as a novel therapeutic target for liver cancer.