Hepatocellular carcinoma (HCC) is a malignancy with dysregulated differentiation. However, effective differentiation therapy for HCC is lacking. Previous evidence suggests that CXCR7 is associated with the differentiation of embryonic stem cells. Here, we evaluated the potential role of CXCR7 in the differentiation of HCC. In HCC cell lines, the expression of cancer stem cell-related markers was assessed by flow cytometry and confirmed by western blot and immunofluorescence analyses. Dimethyl sulfoxide, oncostatin M and dexamethasone were used to induce the differentiation of HCC. Immunohistochemical assay was performed on a tissue microarray based on 112 HCC cases that received hepatectomy. Ligand activation, inhibition assays and RNA interference were used to analyze the regulation of hepatocyte nuclear factor 4α (HNF4α) by the CXCR7 pathway. Huh7 and HCCLM3 cell lines were screened for differentiation induction based on biomarkers of hepatic cancer stem cells. CXCR7 was found to be closely associated with the differentiation of HCC, and an inverse expression trend between CXCR7 and HNF4α was found upon induced differentiation. Clinically, high CXCR7 expression was negatively correlated with HNF4α expression in patients with relatively well-differentiated HCC. Moreover, high CXCR7 expression was correlated with poor overall survival and accelerated post-resection metastasis in HCC with a low HNF4α level. Mechanistically, CXCR7 signaling inhibited HNF4α through extracellular regulated protein kinase (ERK) activation, which was inhibited by U0126, an inhibitor of MAPK/ERK kinases 1 and 2. Knockdown of CXCR7 further confirmed that CXCR7 signaling can regulate HNF4α expression. Taken together, our findings indicate that CXCR7 participates in the differentiation of HCC by regulating HNF4α. The CXCR7-ERK-HNF4α cascade represents a new target for the differentiation therapy of HCC.