Evidence regarding intraductal papillary neoplasm of the bile duct (IPNB) as a new type of precancerous lesion of cholangiocarcinoma is limited. Moreover, a reproducible in vivo model is lacking and IPNB pathogenesis remains unclear. Here, we used a doxycycline-inducible Tet-on mice model facilitating the control of fibroblast growth factor 10 (FGF10) expression which contributes to branching and tubule formation. FGF10-induced IPNB mimicked the multifocal and divergent human IPNB phenotypes via the FGF10–FGFR2–RAS–ERK signalling pathway. A paracrine/autocrine growth factor was sufficient for the initiation and maintenance of IPNB originating from the peribiliary glands, including the biliary stem/progenitor cells. With KrasG12D, p53 and/or p16 gene alterations, Fgf10-induced IPNB showed stepwise carcinogenesis, causing associated invasive carcinoma. Fgf10-induced papillary changes were suppressed by FGF10–FGFR2–RAS–ERK signalling inhibition, which was inhibited with a MEK inhibitor, demonstrating that the signal is a novel therapeutic target for IPNB and associated carcinoma.