Cancer is the most complex genetic disease known, with mutations in more than 250 genes contributing to different forms of the disease 1,2,3 . Most human driver mutations are specific to particular types of cancer, at least in part due to differences in expression pattern between cell types, and the diversity of mutational mechanisms across different human tissues 4 . However, the fact that many apparently oncogenic mutations fail to transform differentiated cells in culture suggests that tumorigenesis is triggered by a specific combination of three elements: the set of driver mutations, the cellular lineage, and the state of differentiation of the cells along the lineage. Here we show that a combination of oncogenes that is characteristic of liver cancer cells (CTNNB1, TERT and MYC) induces cellular senescence in human fibroblasts, and in primary human hepatocytes. However, reprogramming fibroblasts to a liver progenitor fate, induced hepatocytes (iHeps) makes them sensitive to transformation by the same oncogenes. The transformed iHeps are highly proliferative, tumorigenic in nude mice, and bear gene expression signatures of liver cancer. Temporal analysis of the tumorigenic program using single-cell RNA-seq and RNA velocity analysis revealed that the cells progress along a common path to transformation, invariably acquiring liver progenitor cell identity prior to expressing markers characteristic of liver tumor cells. These results, together with analysis of chromatin accessibility using ATAC-seq and NaNoMe-seq indicate that lineage-determining factors act by defining a cell fate and associated chromatin state that are permissive for transformation. Taken together, our results indicate that cell identity is a key determinant in transformation, and establish a paradigm for defining the molecular states of distinct types of human cancer.Cancer genetics and genomics have identified a large number of genes implicated in human cancer 1,2,3 . Although some genes such as p53 and PTEN are commonly mutated in many different types of cancer, most cancer genes are more lineage-specific. It is well