ZFTA-RELA is the most recurrent genetic alteration seen in paediatric supratentorial ependymoma (EPN) and is sufficient to initiate tumours in mice1. Despite its oncogenic potential, ZFTA-RELA (ZR) is observed nearly exclusively in childhood EPN, with tumours located distinctly in the supratentorial brain of the central nervous system1. We proposed that specific chromatin modules accessible during brain development would render distinct cell lineage programs at direct risk of transformation by ZR. To test this hypothesis, we performed combined single-nucleus assay for transposase-accessible chromatin and RNA (snMultiome) sequencing of the developing mouse forebrain compared with ZR-driven mouse and human EPN. We demonstrated that specific developmental lineage programs present in transient progenitor cells and regulated by PLAG/L family transcription factors were at risk of neoplastic transformation. Binding of this chromatin network by ZR or other PLAG/L family motifs targeting fusion oncoproteins led to persistent chromatin accessibility at oncogenic loci and oncogene expression. Cross-species analysis of mouse and human ZR EPN revealed significant cell type heterogeneity indicating incomplete neurogenic and gliogenic differentiation, with a small percentage of cycling progenitor-like or radial glial-like cells that established a putative tumour cell hierarchy. In vivo lineage tracing studies identified neoplastic clones that aggressively dominated tumour growth and established the entire EPN cellular hierarchy. These findings identify developmental epigenomic states that are critical for fusion-oncoprotein-driven transformation and show how these states continue to shape tumour progression.