Abstract“Organoid medicine” has rapidly progressed over the past decade as a new class of therapeutics with high functionality and complexity for addressing unmet medical needs such as effective treatment of patients suffering from chronic liver disease using liver organoids. Here, scalable and xeno‐free integrated differentiation platforms are established to generate hepatic progenitors, mesenchymal stromal cells, and endothelial cells using individual human pluripotent stem cell lines as starting cell types for vascularized liver organoids generation. A scalable microfluidic system is developed to continuously generate cells‐loaded microcapsules with self‐biodegradable 4‐arm‐PEG‐MMP1‐sensitive peptide hydrogel as shell material, to support cells proliferation, self‐condensation, and liver organoids generation through self‐organization. Self‐organized vascularized hepatobiliary organoids (VHOs) containing interconnected biliary networks and vascular structures are generated after optimizing the co‐culture conditions inside hydrogel microcapsules and transferring the organoids to 3D dynamic suspension culture for further maturation. The VHOs show key functional features similar to the fetal and adult liver tissue including the expression of liver‐specific marker genes, the ability to perform main liver metabolic functions, and inducing drug metabolism. The established platforms can be beneficial to the mass production of human liver organoids for liver organoid medicine and the development of safe, effective, and personalized drugs.