Aberrant differentiation, driven by activation of normally silent tissue-specific genes, results in a switch of cell identity and often leads to cancer progression. The underlying genetic and epigenetic events are largely unexplored. Here, we report ectopic activation of the hepatobiliary-, intestinal- and neural-specific gene one cut homeobox 2 (ONECUT2) in various subtypes of lung cancer. ONECUT2 expression was associated with poor prognosis of RAS-driven lung adenocarcinoma. ONECUT2 overexpression promoted the malignant growth and invasion of A549 lung cancer cells in vitro, as well as xenograft tumorigenesis and bone metastases of these cells in vivo. Integrative transcriptomics and epigenomics analyses suggested that ONECUT2 promoted the trans-differentiation of lung cancer cells by preferentially targeting and regulating the activity of bivalent chromatin domains through modulating Polycomb Repressive Complex 2 (PRC2) occupancy. Our findings demonstrate that ONECUT2 is a lineage-specific and context-dependent oncogene in lung adenocarcinoma and suggest that ONECUT2 is a potential therapeutic target for these tumors.