Stem cells expressing reporter constructs are extremely useful for their tracking in vivo or for determining cell lineage fate in vivo and in vitro. We generated liver progenitor cell (LPC) lines from actin-EGFP and TAT-GRE-lacZ mice. LPCs from the actin-EGFP mouse facilitate cell tracing following transplant as the reporter is constitutively expressed. LPCs from the TAT-GRE-lacZ mouse express β-galactosidase under the control of the tyrosine aminotransferase (TAT) promoter and are only active in mature hepatocytes. We found that the utility of such LPC lines becomes severely limited by downregulation of transgene expression following extended culture. We show that epigenetic mechanisms are responsible for suppressing expression of both transgenes. Enhancement of transgene expression in both LPC lines was achieved by treating the cell lines with either the histone acetylating agent sodium butyrate or the DNA demethylating agent 5-azacytidine.