Development of a vascularized liver tissue construct is a need of an hour to circumvent the current demand of liver transplantation in health care sector. An appropriate matrix must support liver cell viability, functionality, and development of microvasculature. With this perspective, here, we report the use of decellularized caprine liver extracellular matrix (CLECM) derived hydrogel for tissue engineering applications. First, CLECM was used as a substrate coating material for 2D hepatocyte culture. HepG2 cells cultured on CLECM-coated surface showed higher albumin, urea, glycogen, and GAGs synthesis in comparison with collagen-coated surface (taken as control for the study). Thereafter, the cells were encapsulated in CLECM hydrogels for 3D culture. In CLECM hydrogels, HepG2 cells showed highly differentiated and polarized phenotype with the appearance of bile canaliculi-like structures and enhanced expression of mature hepatocyte markers. We further showed that CLECM hydrogels also supported the development of microvasculature in vitro, thus making it a suitable candidate for development of a prevascularized liver tissue construct. In conclusion, we proved the superiority of CLECM over collagen for 2D/3D human hepatocyte and endothelial cell culture. CLECM could serve as an efficient biomaterial platform in the development of a liver tissue construct for application in tissue engineering.