Cholangiocyte organoids provide a powerful platform for applications ranging from in vitro modeling to tissue engineering for regenerative medicine. However, their expansion and differentiation are typically conducted in animal-derived hydrogels, which impede the full maturation of organoids into functional cholangiocytes. In addition, these hydrogels are poorly defined and complex, limiting the clinical applicability of organoids. In this study, a novel medium composition combined with synthetic polyisocyanopeptide (PIC) hydrogels to enhance the maturation of intrahepatic cholangiocyte organoids (ICOs) into functional cholangiocytes is utilized. ICOs cultured in the presence of sodium butyrate and valproic acid, a histone deacetylase inhibitor, and a Notch signaling activator, respectively, in PIC hydrogel exhibit a more mature phenotype, as evidenced by increased expression of key cholangiocyte markers, crucial for biliary function. Notably, mature cholangiocyte organoids in PIC hydrogel display apical-out polarity, in contrast to the traditional basal-out polarization of ICOs cultured in Matrigel. Moreover, these mature cholangiocyte organoids effectively model the biliary pro-fibrotic response induced by transforming growth factor beta. Taken together, an animal-free, chemically defined culture system that promotes the ICOs into mature cholangiocytes with apical-out polarity, facilitating regenerative medicine applications and in vitro studies that require access to the apical membrane, is developed.