In the liver, the bile canaliculi of hepatocytes are connected to intrahepatic bile ducts lined with cholangiocytes, which remove cytotoxic bile from the liver tissue. Although liver organoids have been reported, it is not clear whether the functional connection between hepatocytes and cholangiocytes is recapitulated in those organoids. Here, we report the generation of a hepatobiliary tubular organoid (HBTO) using mouse hepatocyte progenitors and cholangiocytes. Hepatocytes form the bile canalicular network and secrete metabolites into the canaliculi, which are then transported into the biliary tubular structure. Hepatocytes in HBTO acquire and maintain metabolic functions including albumin secretion and cytochrome P450 activities, over the long term. In this study, we establish functional liver tissue incorporating a bile drainage system ex vivo. HBTO enable us to reproduce the transport of hepatocyte metabolites in liver tissue, and to investigate the way in which the two types of epithelial cells establish functional connections.