Chemo-resistance is one of the major causes of cancer-related deaths. Here we used single-cell transcriptomics to investigate divergent modes of chemo-resistance in tumor cells. We observed that higher degree of phenotypic intra-tumor heterogeneity (ITH) favors selection of pre-existing drug-resistant cells, whereas phenotypically homogeneous cells engage covert epigenetic mechanisms to trans-differentiate under drug-selection. This adaptation was driven by selection-induced gain of H3K27ac marks on bivalently poised resistance-associated chromatin, and therefore not expressed in the treatment-naïve setting. Mechanistic interrogation of this phenomenon revealed that drug-induced adaptation was acquired upon the loss of stem factor SOX2, and a concomitant gain of SOX9. Strikingly we observed an enrichment of SOX9 at drug-induced H3K27ac sites, suggesting that tumor evolution could be driven by stem cell-switch-mediated epigenetic plasticity. Importantly, JQ1 mediated inhibition of BRD4 could reverse drug-induced adaptation. These results provide mechanistic insights into the modes of therapy-induced cellular plasticity and underscore the use of epigenetic inhibitors in targeting tumor evolution.