We hypothesized that the highly controlled pattern of gene expression that is essential for liver regeneration is encoded by an epigenetic code set in quiescent hepatocytes. Here we report that epigenetic and transcriptomic profiling of quiescent and regenerating mouse livers define chromatin states that dictate gene expression and transposon repression. We integrate ATACseq and DNA methylation profiling with ChIPseq for the histone marks H3K4me3, H3K27me3 and H3K9me3 and the histone variant H2AZ to identify 6 chromatin states with distinct functional characteristics. We show that genes involved in proliferation reside in active states, but are marked with H3K27me3 and silenced in quiescent livers. We find that during regeneration, H3K27me3 is depleted from their promoters, facilitating their dynamic expression. These findings demonstrate that hepatic chromatin states in quiescent livers predict gene expression and that pro-regenerative genes are maintained in active chromatin states, but are restrained by H3K27me3, permitting a rapid and synchronized response during regeneration.