Long noncoding RNA cancer upregulated drug resistant (CUDR) is overexpressed in many tumors and promotes tumorigenesis. Herein, we demonstrate CUDR could enhance the human embryonic stem cells (ESC) differentiation into hepatocyte-like cells by reducing trimethylation on histone H3 twenty-seventh lysine (H3K27me3). On the other hand, excessive CUDR triggers hepatocyte-like cells malignant transformation. Mechanistically, we identify CUDR causes highly upregulated in liver cancer (HULC) and β-catenin abnormal expression by inhibiting HULC promoter methylation and promoting β-catenin promoter-enhancer chromatin looping formation mediated by CUDR-ccctc-binding factor (CTCF) complex, which recruits more RNA polII and P300. Strikingly, HULC and β-catenin activity are crucial for CUDR oncogenic function. These findings provide the first demonstration that CUDR plays a positive potential role in liver cancer stem cell through the cascade of CUDR-HULC/CUDR-β-catenin signaling, and offer insights into a novel link between long noncoding RNA (lncRNA) and the epigenetic modification in cancer stem cells.