Epigenetic modifications, including histone modifications, stabilize cell-specific gene expression programmes to maintain cell identities in both metazoans and land plants1-3. Notwithstanding the existence of these stable cell states, in land plants, stem cells are formed from differentiated cells during post-embryonic development and regeneration4-6, indicating that land plants have an intrinsic ability to regulate epigenetic memory to initiate a new gene regulatory network. However, it is less well understood how epigenetic modifications are locally regulated to influence the specific genes necessary for cellular changes without affecting other genes in a genome. In this study, we found that ectopic induction of the AP2/ERF transcription factor STEMIN1 in leaf cells of the moss Physcomitrella patens decreases a repressive chromatin mark, histone H3 lysine 27 trimethylation (H3K27me3), on its direct target genes before cell division, resulting in the conversion of leaf cells to chloronema apical stem cells. STEMIN1 and its homologues positively regulate the formation of secondary chloronema apical stem cells from chloronema cells during development. Our results suggest that STEMIN1 functions within an intrinsic mechanism underlying local H3K27me3 reprogramming to initiate stem cell formation.