Hepatocytes are replenished gradually during homeostasis and robustly after liver injury^{1, 2}. In adults, new hepatocytes originate from the existing hepatocyte pool^3-8, but the cellular source of renewing hepatocytes remains unclear. Telomerase is expressed in many stem cell populations, and mutations in telomerase pathway genes have been linked to liver diseases^9-11. Here we identify a subset of hepatocytes that expresses high levels of telomerase and show that this hepatocyte subset repopulates the liver during homeostasis and injury. Using lineage tracing from the telomerase reverse transcriptase (Tert) locus in mice, we demonstrate that rare hepatocytes with high telomerase expression (TERT^High hepatocytes) are distributed throughout the liver lobule. During homeostasis, these cells regenerate hepatocytes in all lobular zones, and both self-renew and differentiate to yield expanding hepatocyte clones that eventually dominate the liver. In response to injury, the repopulating activity of TERT^High hepatocytes is accelerated and their progeny cross zonal boundaries. RNA sequencing shows that metabolic genes are downregulated in TERT^High hepatocytes, indicating that metabolic activity and repopulating activity may be segregated within the hepatocyte lineage. Genetic ablation of TERT^High hepatocytes combined with chemical injury causes a marked increase in stellate cell activation and fibrosis. These results provide support for a 'distributed model' of hepatocyte renewal in which a subset of hepatocytes dispersed throughout the lobule clonally expands to maintain liver mass.