Human iPSC-derived hepatocytes hold great promise as a cell source for cell therapy and drug screening. However, the culture method for highly-quantified hepatocytes has not yet been established. Herein, we have developed an encapsulation and 3D cultivation method for iPSC-hepatocytes in core-shell hydrogel microfibers (a.k.a. cell fiber). In the fiber-shaped 3D microenvironment consisting of abundant extracellular matrix (ECM), the iPSC-hepatocytes exhibited many hepatic characteristics, including the albumin secretion, and the expression of the hepatic marker genes (ALB, HNF4α, ASGPR1, CYP2C19, and CYP3A4). Furthermore, we found that the fibers were mechanically stable and can be applicable to hepatocyte transplantation. Three days after transplantation of the microfibers into the abdominal cavity of immunodeficient mice, human albumin was detected in the peripheral blood of the transplanted mice. These results indicate that the iPSC-hepatocyte fibers are promising either as in vitro models for drug screening or as implantation grafts to treat liver failure.