It is well established that pluripotent stem cells in fetal and postnatal liver (LPCs) can differentiate into both hepatocytes and cholangiocytes. However, the signaling pathways implicated in the differentiation of LPCs are still incompletely understood. Transcription Factor EB (TFEB), a master regulator of lysosomal biogenesis and autophagy, is known to be involved in osteoblast and myeloid differentiation, but its role in lineage commitment in the liver has not been investigated. Here we show that during development and upon regeneration TFEB drives the differentiation status of murine LPCs into the progenitor/cholangiocyte lineage while inhibiting hepatocyte differentiation. Genetic interaction studies show that Sox9, a marker of precursor and biliary cells, is a direct transcriptional target of TFEB and a primary mediator of its effects on liver cell fate. In summary, our findings identify an unexplored pathway that controls liver cell lineage commitment and whose dysregulation may play a role in biliary cancer.