Bioreactors containing porcine or adult human hepatocytes have been used to sustain acute liver failure patients until liver transplantation. However, prolonged function of adult hepatocytes has not been achieved due to compromised proliferation and viability of adult cells in vitro. We investigated the use of fetal hepatocytes as an alternative cell source in bioreactors. Mouse fetal liver cells from gestational day 17 possessed intermediate differentiation and function based on their molecular profile. When cultured in a three-dimensional four-compartment hollow fiber-based bioreactor for 3 to 5 weeks these cells formed neo-tissues that were characterized comprehensively. Albumin liberation, testosterone metabolism, and P450 induction were demonstrated. Histology showed predominant ribbon-like three-dimensional structures composed of hepatocytes between hollow fibers. High positivity for proliferating cell nuclear antigen and Ki-67 and low positivity for terminal dUTP nick-end labeling indicated robust cell proliferation and survival. Most cells within these ribbon arrangements were albumin-positive. In addition, cells in peripheral zones were simultaneously positive for alpha-fetoprotein, cytokeratin-19, and c-kit, indicating their progenitor phenotype. Mesenchymal components including endothelial, stellate, and smooth muscle cells were also observed. Thus, fetal liver cells can survive, proliferate, differentiate, and function in a three-dimensional perfusion culture system while maintaining a progenitor pool, reflecting an important advance in hepatic tissue engineering.