In this study, we demonstrate the ability of a three-dimensional co-culture model to preserve some key aspects of differentiated hepatocyte function in vitro. Freshly isolated rat hepatocytes in co-culture with activated stellate cells rapidly aggregate to form well-defined viable spheroids. After 5 days in culture, the spheroids have a complex extracellular matrix support and hepatic ultrastructure including bile canaliculi, tight junctions, desmosomes and lipid storage. Co-culture spheroids have superior cytochrome P450 (CYP450) 3A and 2B function, and increased inducibility of 2B function, relative to a range of hepatocyte monoculture techniques (high-performance liquid chromatography of testosterone metabolites). Increased function in co-culture is supported by greater expression of CYP450 3A23, 1A2, and 2E1 mRNA relative to monoculture (reverse transcriptase quantitative polymerase chain reaction). Also, high hepatocyte growth factor mRNA expression in co-culture suggests a post-traumatic, or possibly regenerative, environment. A preliminary study of human hepatocytes co-cultured with rat stellate cells demonstrated prolonged function of CYP450 3A4, 2C19 and 2C9. This study shows that stellate cells facilitate spheroid formation, influence spheroid architecture, and are an effective method of preserving some aspects of hepatocyte function in the early stage of culture.