Maintenance of epithelial cell shape and polarity determines many vital cell functions, including the appropriate response to external stimuli. Murine hepatocytes cultured in a three-dimensional Matrigel matrix formed highly polarized organoids characterized by specific localization of an ERM (ezrin/radixin/moesin) protein, radixin, at microvillus-lined membrane domains. These apical domains surrounded a lumen and were bordered by tight junctions. The hepatocyte organoids were functional as judged by the high level of albumin secretion and accumulation of bilirubin. Stimulation of the Fas/CD95 death receptor, which is highly hepatotoxic in vivo, was a strong inducer of apoptosis in the polarized organoids. This was in sharp contrast to the monolayer hepatocyte cultures, which were protected from death by exacerbated NF-κB signalling following engagement of the death receptors. Thus, hepatocytes in polarized, functional organoids modulate an intracellular signal transduction pathway, allowing the recapitulation of their physiological response to an apoptotic stimulus.