Clinical studies have suggested a correlation between human cytomegalovirus (HCMV) and biliary atresia (BA), but the pathogenesis remains poorly understood. BA occurs in the newborn and is characterised by blockage of the bile duct due to fibrosis from the epithelial cells known as cholangiocytes, requiring the Kansai’s portoenterostomy (KPE) surgical procedure which has a high risk of complications. This study aims to provide the direct link between HCMV infection and the pathogenic mechanism of HCMV-associated BA. A total of 49 human liver tissues from patients with BA and non-BA conditions (choledochal cyst [CC] and hepatoblastoma [HB]) were examined using the RNAscope assay to detect HCMV-DNA. Among them, 19 BA samples (65.5%) and 7 non-BA samples (35.0%) were positive for HCMV-DNA. Human induced pluripotent stem cell (iPSC)-derived cholangiocyte-like cell (CLC) organoids were used to establish a direct HCMV infection model for investigating the role of HCMV in the development of BA. The infection of CLC organoids with the HCMV strain TB40/E encoding enhanced green fluorescent protein resulted in reduced organoid growth, induced deformation, and loss of function. In the organoids, detection of HCMV-DNA, low level of infectious virions, and viral transcripts are suggestive of a productive infection occurring. Bioinformatics analysis of bulk RNA sequencing data showed that that differentially expressed genes in mock- and HCMV-infected organoids were highly enriched in the epithelial–mesenchymal transition (EMT) pathway. Reverse transcription quantitative real-time PCR (RT-qPCR) and immunofluorescence confirmed that HCMV infection reduced E-cadherin expression and increased N-cadherin expression. Blockade of TGF-b signalling abrogated the EMT induction effect in the HCMV-infected organoids. Our data established the first model that demonstrates a relationship between HCMV infection and BA. The persistence of HCMV infection in cholangiocytes induces TGF-b/EMT, which may contribute to the development and progression of BA.