Liver tissue engineering has emerged as a promising approach in organ transplantation but has been hampered by the lack of a reliable and readily available cell source. Human induced pluripotent stem cells hiPSCs have been highlighted as a desirable source, due to their differentiation potential, ability to self‐renew, and the possibility of making patient‐specific cells. We developed a decellularization protocol that efficiently removes cellular material while retaining extracellular matrix components. Subsequently, hiPSCs were differentiated on decellularized human liver extracellular matrix (hDLM) scaffolds using an established hepatic differentiation protocol. We demonstrate that using hDLM leads to upregulation markers of hepatic functions when compared with standard differentiation conditions. In addition, expression of a number of hepatic transcription and nuclear factors were found to be within levels comparable with those of primary human adult hepatocytes. Analysis of progression of differentiation on hDLM demonstrated that hepatic developmental marker expression was consistent with hepatic development. The hDLM‐derived cells exhibited key hepatic characteristics that were comparable with those observed in primary neonatal human hepatocytes. We investigated the optimal timing of the introduction of hDLM into the differentiation protocol and found that the best results are obtained when cells are plated on hDLM since the earliest stages and accompanied by a progressive loss of sensitivity to substrate composition at later stages. The significance of this work is that it allows for the development of differentiation protocols that take into account signals from extracellular matrix, closely recapitulating of the in vivo micro‐environment and resulting in cells that are phenotypically closer to mature hepatocytes.