A self-organizing organoid model provides a new approach to study the mechanism of human liver organogenesis. Previous animal models documented that simultaneous paracrine signaling and cell-to-cell surface contact regulate hepatocyte differentiation. To dissect the relative contributions of the paracrine effects, we first established a liver organoid using human induced pluripotent stem cells (iPSCs), mesenchymal stem cells (MSCs) and human umbilical vein endothelial cells (HUVECs) as previously reported. Time-lapse imaging showed that hepatic-specified endoderm iPSCs (HE-iPSCs) self-assembled into three-dimensional organoids, resulting in hepatic gene induction. Progressive differentiation was demonstrated by hepatic protein production after organoid transplantation. To assess the paracrine contributions, we employed a Transwell system in which HE-iPSCs were separately co-cultured with MSCs and/or HUVECs. Although the three-dimensional structure did not form, their soluble factors induced a hepatocyte-like phenotype in HE-iPSCs, resulting in the expression of bile salt export pump. In conclusion, the mesoderm-derived paracrine signals promote hepatocyte maturation in liver organoids, but organoid self-organization requires cell-to-cell surface contact. Our model demonstrates a novel approach to identify developmental paracrine signals regulating the differentiation of human hepatocytes.