(abridged) We study the consequence of star formation (SF) in an self-gravity dominated accretion disk in quasars. The warm skins of the SF disk are governed by the radiation from the inner part of the accretion disk to form Compton atmosphere (CAS). The CAS are undergoing four phases to form broad line regions. Phase I is the duration of pure accumulation supplied by the SF disk. During phase II clouds begin to form due to line cooling and sink to the SF disk. Phase III is a period of preventing clouds from sinking to the SF disk through dynamic interaction between clouds and the CAS. Finally, phase IV is an inevitable collapse of the entire CAS through line cooling. This CAS evolution drives the episodic appearance of BLRs. Geometry and dynamics of BLRs can be self-consistently derived from the thermal instability of the CAS during phases II and III by linear analysis. The metallicity gradient of SF disk gives rise to different properties of clouds from outer to inner part of BLRs. We find that clouds have column density N_H < 10^22cm^{-2} in the metal-rich regions whereas they have N_H > 10^22 cm^{-2} in the metal-poor regions. The metal-rich clouds compose the high ionization line (HIL) regions whereas the metal-poor clouds are in low ionization line (LIL) regions. Metal-rich clouds in HIL regions will be blown away by radiation pressure, forming the observed outflows. The LIL regions are episodic due to the mass cycle of clouds with the CAS in response to continuous injection by the SF disk, giving rise to different types of AGNs. Based on SDSS quasar spectra, we identify a spectral sequence in light of emission line equivalent width from Phase I to IV. A key phase in the episodic appearance of the BLRs is bright type II AGNs with no or only weak BLRs. We discuss observational implications and tests of the theoretical predictions of this model.
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