In biological and medical literature, alternative hypotheses for initial bile duct lumen formation during embryogenesis exist, which so far remained largely untested. Guided by the quantification of morphological features and expression of genes in developing bile ducts from embryonic mouse liver, these hypotheses were sharpened and data collected that permitted to develop a high resolution individual-based computational model to test the alternative hypotheses in silico. Simulations with this model suggest that successful bile duct lumen formation primarily requires the simultaneous contribution of directed cell division of cholangiocytes, local osmotic effects generated by salt excretion in the lumen, and temporally-controlled differentiation of hepatoblasts to cholangiocytes, with apical constriction of cholangiocytes only moderately affecting luminal size.