Severe damage to the intrahepatic biliary duct (IHBD) network occurs in multiple human advanced cholangiopathies, such as primary sclerosing cholangitis, biliary atresia and end-stage primary biliary cholangitis. Whether and how a severely damaged IHBD network could reconstruct has remained unclear. Here we show that, although the gallbladder is not directly connected to the IHBD, there is a common hepatic duct (CHD) in between, and severe damage to the IHBD network induces migration of gallbladder smooth muscle cells (SMCs) to coat the CHD in mouse and zebrafish models. These gallbladder-derived, CHD-coating SMCs produce retinoic acid to activate Sox9b in the CHD, which drives proliferation and ingrowth of CHD cells into the inner liver to reconstruct the IHBD network. This study reveals a hitherto unappreciated function of the gallbladder in the recovery of injured liver, and characterizes mechanisms involved in how the gallbladder and liver communicate through inter-organ cell migration to drive tissue regeneration. Carrying out cholecystectomy will thus cause previously unexpected impairments to liver health.