The human airways are complex structures with important interactions between cells, extracellular matrix (ECM) proteins and the biomechanical microenvironment. A robust, well-differentiated in vitro culture system that accurately models these interactions would provide a useful tool for studying normal and pathological airway biology. Here, we report the development and characterization of a physiologically relevant air–liquid interface (ALI) 3D airway ‘organ tissue equivalent’ (OTE) model with three novel features: native pulmonary fibroblasts, solubilized lung ECM, and hydrogel substrate with tunable stiffness and porosity. We demonstrate the versatility of the OTE model by evaluating the impact of these features on human bronchial epithelial (HBE) cell phenotype. Variations of this model were analyzed during 28 days of ALI culture by evaluating epithelial confluence, trans-epithelial electrical resistance, and epithelial phenotype via multispectral immuno-histochemistry and next-generation sequencing. Cultures that included both solubilized lung ECM and native pulmonary fibroblasts within the hydrogel substrate formed well-differentiated ALI cultures that maintained a barrier function and expressed mature epithelial markers relating to goblet, club, and ciliated cells. Modulation of hydrogel stiffness did not negatively impact HBE differentiation and could be a valuable variable to alter epithelial phenotype. This study highlights the feasibility and versatility of a 3D airway OTE model to model the multiple components of the human airway 3D microenvironment.