Bioartificial liver support systems have demonstrated limited efficacy in compensation of liver detoxification and substitution of liver-derived factors. However, in these devices, the biological substitution of the complex liver function has been restricted to xenogeneic or transformed hepatocytes. Therefore, we have examined the long-term effect of coculturing normal human hepatocytes (HCs) with allogeneic biliary epithelial cells (BECs). We applied functional in vitro assays to examine their metabolic potential by ammonia detoxification to urea, cytochrome P450-dependent lignocaine conversion to mono-ethyl-glycine-xylidide (MEGX), and protein expression and secretion. As the liver has a pivotal role in the synthesis of coagulation factors, we measured antithrombin III (AT III), factor VII, and albumin, comparing HCs plated on collagen or inside 3-dimensional collagen gels. Over 30 days, expression and secretion of albumin and clotting factors by human HCs were augmented by culture inside collagen gel, but were also enhanced and better maintained by coculture with BECs. Higher proportions of BECs cocultured with HCs substantially increased the protein synthesis and urea production. Remarkably, the almost absent cytochrome P450 activity of HC alone after 1 week could be reversed and maintained over 3 weeks by coculture with BECs. The pattern of these effects differed from the extent of interleukin-6 (IL-6) production and HC viability under the compared conditions. In conclusion, coculture of human HCs with BECs impressively restores the synthetic and metabolic liver function in vitro. These results suggest mechanisms of improved liver epithelial differentiation supported by coculture conditions. This technique offers new perspectives in bioartificial liver support, hepatocyte transplantation, and stem cell differentiation.