In embryonic liver, hepatic progenitor cells are actively proliferating and generate a fundamental cellular pool for establishing parenchymal components. However, the molecular basis for the expansion of the progenitors maintaining their immature state remains elusive. Polycomb group proteins regulate gene expression throughout the genome by modulating of chromatin structure and play crucial roles in development. Enhancer of zeste homolog 2 (Ezh2), a key component of polycomb group proteins, catalyzes tri-methylation of lysine 27 of histone H3 (H3K27me3), which trigger the gene suppression. In the present study, we investigated a role of Ezh2 in the regulation of the expanding hepatic progenitor population in vivo. We found that Ezh2 is highly expressed in the actively proliferating cells at the early developmental stage. Using a conditional knockout mouse model, we show that the deletion of the SET domain of Ezh2, which is responsible for catalytic induction of H3K27me3, results in significant reduction of the total liver size, absolute number of liver parenchymal cells, and hepatic progenitor cell population in size. A clonal colony assay in the hepatic progenitor cells directly isolated from in vivo fetal livers revealed that the bi-potent clonogenicity was significantly attenuated by the Ezh2 loss of function. Moreover, a marker expression based analysis and a global gene expression analysis showed that the knockout of Ezh2 inhibited differentiation to hepatocyte with reduced expression of a number of liver-function related genes. Taken together, our results indicate that Ezh2 is required for the hepatic progenitor expansion in vivo, which is essential for the functional maturation of embryonic liver, through its activity for catalyzing H3K27me3.