Pluripotent stem cell (PSC)-derived hepatocyte-like cells (HLC) have enormous potential as a replacement for primary hepatocytes in drug screening, toxicology and cell replacement therapy, but their genome-wide expression patterns differ strongly from primary human hepatocytes (PHH). We differentiated human induced pluripotent stem cells (hiPSC) via definitive endoderm to HLC and characterized the cells by single-cell and bulk RNA-seq, with complementary epigenetic analyses. We then compared HLC to PHH and publicly available data on human fetal hepatocytes (FH) exvivo; we performed bioinformatics-guided interventions to improve HLC differentiation via lentiviral transduction of the nuclear receptor FXR and agonist exposure. Single-cell RNA-seq revealed that transcriptomes of individual HLC display a hybrid state, where hepatocyte-associated genes are expressed in concert with genes that are not expressed in PHH - mostly intestinal genes - within the same cell. Bulk-level overrepresentation analysis, as well as regulon analysis at the single-cell level, identified sets of regulatory factors discriminating HLC, FH, and PHH, hinting at a central role for the nuclear receptor FXR in the functional maturation of HLC. Combined FXR expression plus agonist exposure enhanced the expression of hepatocyte-associated genes and increased the ability of bile canalicular secretion as well as lipid droplet formation, thereby increasing HLCs' similarity to PHH. The undesired non-liver gene expression was reproducibly decreased, although only by a moderate degree. In contrast to physiological hepatocyte precursor cells and mature hepatocytes, HLC co-express liver and hybrid genes in the same cell. Targeted modification of the FXR gene regulatory network improves their differentiation by suppressing intestinal traits whilst inducing hepatocyte features. Generation of human hepatocytes from stem cells represents an active research field but its success is hampered by the fact that the stem cell-derived 'hepatocytes' still show major differences to hepatocytes obtained from a liver. Here, we identified an important reason for the difference, specifically that the stem cell-derived 'hepatocyte' represents a hybrid cell with features of hepatocytes and intestinal cells. We show that a specific protein (FXR) suppresses intestinal and induces liver features, thus bringing the stem cell-derived cells closer to hepatocytes derived from human livers.