Human pluripotent stem cell-derived hepatocytes have the potential to provide in vitro model systems for drug discovery and hepatotoxicity testing. However, these cells are currently unsuitable for drug toxicity and efficacy testing because of their limited expression of genes encoding drug-metabolizing enzymes, especially cytochrome P450 (CYP) enzymes. Transcript levels of major CYP genes were much lower in human embryonic stem cellderived hepatocytes (hESC-Hep) than in human primary hepatocytes (hPH). To verify the mechanism underlying this reduced expression of CYP genes, including CYP1A1, CYP1A2, CYP1B1, CYP2D6, and CYP2E1, we investigated their epigenetic regulation in terms of DNA methylation and histone modifications in hESC-Hep and hPH. CpG islands of CYP genes were hypermethylated in hESC-Hep, whereas they had an open chromatin structure, as represented by hypomethylation of CpG sites and permissive histone modifications, in hPH. Inhibition of DNA methyltransferases (DNMTs) during hepatic maturation induced demethylation of the CpG sites of CYP1A1 and CYP1A2, leading to the up-regulation of their transcription. Combinatorial inhibition of DNMTs and histone deacetylases (HDACs) increased the transcript levels of CYP1A1, CYP1A2, CYP1B1, and CYP2D6. Our findings suggest that limited expression of CYP genes in hESC-Hep is modulated by epigenetic regulatory factors such as DNMTs and HDACs.