Chemically induced liver progenitor (CLiP) cells, converted in vitro from mature hepatocytes, possess the bipotentiality to differentiate into both hepatocytes and cholangiocytes. Here, we aimed to investigate the optimal conditions for bile duct (BD) induction from rat CLiPs. A two-step induction protocol was used for the differentiation of cholangiocytes. We investigated the effects of passage number, preincubation times, Matrigel, and mouse embryonic fibroblast (MEF) feeder cells on the induction of cholangiocytes. Earlier passages of CLiPs were better for BD induction compared with stable CLiPs. Extending the preincubation time of CLiPs before induction delayed the formation of the BD. Matrigel provided cells with space to form three-dimensional (3D) structures, but the long-term use of Matrigel from the induction step did not benefit the differentiation of CLiPs to cholangiocytes. MEF feeder cells, through the Jag/Notch pathway, affected BD formation and function, as well as gene and protein expression. CLiPs were a good cell source for cholangiocyte differentiation under appropriate conditions and may offer a key vehicle for the study of cholangiopathies in vitro.