Biliary ducts collect bile from liver lobules, the smallest functional and anatomical units of liver, and carry it to the gallbladder. Disruptions in this process caused by defective embryonic development, or through ductal reaction in liver disease have a major impact on life quality and survival of patients. A deep understanding of the processes underlying bile duct lumen formation is crucial to identify intervention points to avoid or treat the appearance of defective bile ducts. Several hypotheses have been proposed to characterize the biophysical mechanisms driving initial bile duct lumen formation during embryogenesis. Here, guided by the quantification of morphological features and expression of genes in bile ducts from embryonic mouse liver, we sharpened these hypotheses and collected data to develop a high resolution individual cell-based computational model that enables to test alternative hypotheses in silico. This model permits realistic simulations of tissue and cell mechanics at sub-cellular scale. Our simulations suggest that successful bile duct lumen formation requires a simultaneous contribution of directed cell division of cholangiocytes, local osmotic effects generated by salt excretion in the lumen, and temporally-controlled differentiation of hepatoblasts to cholangiocytes, with apical constriction of cholangiocytes only moderately affecting luminal size.