Mutations in isocitrate dehydrogenase 1 (IDH1) and IDH2 are among the most common genetic alterations in intrahepatic cholangiocarcinoma (IHCC), a deadly liver cancer. Mutant IDH proteins in IHCC and other malignancies acquire an abnormal enzymatic activity allowing them to convert α-ketoglutarate (αKG) to 2-hydroxyglutarate (2HG), which inhibits the activity of multiple αKG-dependent dioxygenases, and results in alterations in cell differentiation, survival, and extracellular matrix maturation. However, the molecular pathways by which IDH mutations lead to tumour formation remain unclear. Here we show that mutant IDH blocks liver progenitor cells from undergoing hepatocyte differentiation through the production of 2HG and suppression of HNF-4α, a master regulator of hepatocyte identity and quiescence. Correspondingly, genetically engineered mouse models expressing mutant IDH in the adult liver show an aberrant response to hepatic injury, characterized by HNF-4α silencing, impaired hepatocyte differentiation, and markedly elevated levels of cell proliferation. Moreover, IDH and Kras mutations, genetic alterations that co-exist in a subset of human IHCCs, cooperate to drive the expansion of liver progenitor cells, development of premalignant biliary lesions, and progression to metastatic IHCC. These studies provide a functional link between IDH mutations, hepatic cell fate, and IHCC pathogenesis, and present a novel genetically engineered mouse model of IDH-driven malignancy.