At least some cancer stem cells (CSCs) display intrinsic drug resistance that may thwart eradication of a malignancy by chemotherapy. We explored the genesis of such resistance by studying mouse models of liver cancer driven by either MYC or the combination of oncogenic forms of activation of v‐akt murine thymoma viral oncogene homolog (AKT) and NRAS. A common manifestation of chemoresistance in CSCs is efflux of the DNA‐binding dye Hoechst 33342. We found that only the MYC‐driven tumors contained a subset of cells that efflux Hoechst 33342. This “side population” (SP) was enriched for CSCs when compared to non‐SP tumor cells and exhibited markers of hepatic progenitor cells. The SP cells could differentiate into non‐SP tumor cells, with coordinate loss of chemoresistance, progenitor markers, and the enrichment for CSCs. In contrast, non‐SP cells did not give rise to SP cells. Exclusion of Hoechst 33342 is mediated by ATP binding cassette drug transporter proteins that also contribute to chemoresistance in cancer. We found that the multidrug resistance gene 1 (MDR1) transporter was responsible for the efflux of Hoechst from SP cells in our MYC‐driven model. Accordingly, SP cells and their tumor‐initiating subset were more resistant than non‐SP cells to chemotherapeutics that are effluxed by MDR1. Conclusion: The oncogenotype of a tumor can promote a specific mechanism of chemoresistance that can contribute to the survival of hepatic CSCs. Under circumstances that promote differentiation of CSCs into more mature tumor cells, the chemoresistance can be quickly lost. Elucidation of the mechanisms that govern chemoresistance in these mouse models may illuminate the genesis of chemoresistance in human liver cancer. (HEPATOLOGY 2012)