During biliary disease, cholangiocytes become activated by various pathological stimuli, including transforming growth factor β (TGF‐β). The result is an epigenetically regulated transcriptional program leading to a pro‐fibrogenic microenvironment, activation of hepatic stellate cells (HSCs), and progression of biliary fibrosis. This study evaluated how TGF‐β signaling intersects with epigenetic machinery in cholangiocytes to support fibrogenic gene transcription. We performed RNA sequencing in cholangiocytes with or without TGF‐β. Ingenuity pathway analysis identified “HSC Activation” as the highly up‐regulated pathway, including overexpression of fibronectin 1 (FN), connective tissue growth factor, and other genes. Bioinformatics identified enhancer of zeste homologue 2 (EZH2) as an epigenetic regulator of the cholangiocyte TGF‐β response. EZH2 overexpression suppressed TGF‐β‐induced FN protein in vitro, suggesting FN as a direct target of EZH2‐based repression. Chromatin immunoprecipitation assays identified an FN promoter element in which EZH2‐mediated tri‐methylation of lysine 27 on histone 3 is diminished by TGF‐β. TGF‐β also caused a 50% reduction in EZH2 protein levels. Proteasome inhibition rescued EZH2 protein and led to reduced FN production. Immunoprecipitation followed by mass spectrometry identified ubiquitin protein ligase E3 component N‐recognin 4 in complex with EZH2, which was validated by western blotting in vitro. Ubiquitin mutation studies suggested K63‐based ubiquitin linkage and chain elongation on EZH2 in response to TGF‐β. A deletion mutant of EZH2, lacking its N‐terminal domain, abrogates both TGF‐β‐stimulated EZH2 degradation and FN release. In vivo, cholangiocyte‐selective knockout of EZH2 exacerbates bile duct ligation–induced fibrosis whereas MDR2^‐/‐ mice are protected from fibrosis by the proteasome inhibitor bortezomib. Conclusion: TGF‐β regulates proteasomal degradation of EZH2 through N‐terminal, K63‐linked ubiquitination in cholangiocytes and activates transcription of a fibrogenic gene program that supports biliary fibrosis.