Background & Aims: Progressive familial intrahepatic cholestasis type 3 (PFIC3), for which there are limited therapeutic options, often leads to end-stage liver disease before adulthood due to impaired ABCB4-dependent phospholipid transport to bile. Using adeno-associated virus serotype 8 (AAV8)-mediated gene therapy, we aimed to restore the phospholipid content in bile to levels that prevent liver damage, thereby enabling stable hepatic ABCB4 expression and long-term correction of the phenotype in a murine model of PFIC3. Methods: Ten-week-old Abcb4−/− mice received a single dose of AAV8-hABCB4 (n = 10) or AAV8-GFP (n = 7) under control of a liver specific promoter via tail vein injection. Animals were sacrificed either 10 or 26 weeks after vector administration to assess transgene persistence, after being challenged with a 0.1% cholate diet for 2 weeks. Periodic evaluation of plasma cholestatic markers was performed and bile duct cannulation enabled analysis of biliary phospholipids. Liver fibrosis and the Ki67 proliferation index were assessed by immunohistochemistry. Results: Stable transgene expression was achieved in all animals that received AAV8-hABCB4 up to 26 weeks after administration. AAV8-hABCB4 expression restored biliary phospholipid excretion, increasing the phospholipid and cholesterol content in bile to levels that ameliorate liver damage. This resulted in normalization of the plasma cholestatic markers, alkaline phosphatase and bilirubin. In addition, AAV8-hABCB4 prevented progressive liver fibrosis and reduced hepatocyte proliferation for the duration of the study. Conclusion: Liver-directed gene therapy provides stable hepatic ABCB4 expression and long-term correction of the phenotype in a murine model of PFIC3. Translational studies that verify the clinical feasibility of this approach are warranted. Lay summary: Progressive familial intrahepatic cholestasis type 3 (PFIC3) is a severe genetic liver disease that results from impaired transport of lipids to bile, which makes the bile toxic to liver cells. Because therapeutic options are currently limited, this study aims to evaluate gene therapy to correct the underlying genetic defect in a mouse model of this disease. By introducing a functional copy of the missing gene in liver cells of mice, we were able to restore lipid transport to bile and strongly reduce damage to the liver. The proliferation of liver cells was also reduced, which contributes to long-term correction of the phenotype. Further studies are required to evaluate whether this approach can be applied to patients with PFIC3.