Intratumor heterogeneity is increasingly recognized as a major factor impacting diagnosis and personalized treatment of cancer. We characterized stochastic phenotype switching as a novel mechanism contributing to intratumor heterogeneity and malignant potential of liver cancer. Clonal analysis of primary tumor cell cultures of a human sarcomatoid cholangiocarcinoma identified different types of self-propagating subclones characterized by stable (keratin-7-positive or keratin-7-negative) phenotypes and an unstable phenotype consisting of mixtures of keratin-7-positive and keratin-7-negative cells, which lack stem cell features but may reversibly switch their phenotypes. Transcriptome sequencing and immunohistochemical studies with the markers Zeb1 and CD146/MCAM demonstrated that switching between phenotypes is linked to changes in gene expression related but not identical to epithelial-mesenchymal transition. Stochastic phenotype switching occurred during mitosis and did not correlate with changes in DNA methylation. Xenotransplantation assays with different cellular subclones demonstrated increased tumorigenicity of cells showing phenotype switching, resulting in tumors morphologically resembling the invasive component of primary tumor and metastasis. Conclusion. Our data demonstrate that stochastic phenotype switching contributes to intratumor heterogeneity and that cells with a switching phenotype have increased malignant potential.