Designing a three-dimensional (3D) macroporous scaffold with desired bio-functional properties is an important aspect for fabricating an in vitro liver tissue model with applications in pre-clinical therapeutics testing. In the present study a bio-polymeric composite scaffold of agarose–chitosan (AG–CH) was synthesized at optimized sub-zero temperature and evaluated for its suitability in in vitro liver tissue engineering. The scaffold showed high porosity (83 ± 2%) with interconnected pores (average pore diameter 40–70 μm). High swelling kinetics on account of the hydrophilic pore channels in the AG–CH scaffold allows unhindered migration of cells and gaseous exchange. At neutral pH, the negative charge on the surface of the AG–CH scaffold ensures increased cell-to-cell interfacial interaction followed by colonization of hepatocytes. Rheological studies of the hydrated scaffold demonstrate its high sponge-like visco-elastic behavior without any fracture deformation up to 34 ± 1 N, which insinuates its applicability for soft-tissue engineering. The AG–CH scaffold showed ∼15% degradation in a span of four weeks in sterile PBS at physiological pH, which could help to maintain the structural integrity of neo-tissue formation. In vitro primary hepatocytes proliferation in the AG–CH scaffold showed an increase in cellular metabolic activity. The hepatic functions like albumin secretion and urea synthesis were established for the primary hepatocytes in the 3D scaffold and were higher in comparison to the control. The expression of hepatic CYP450 biomarker was observed in the in vitro cultured hepatocytes immobilized in the 3D AG–CH scaffold. Thus, the AG–CH scaffold with suitable physico-chemical properties and hepatic cell compatibility present its potential for developing an in vitro liver tissue model.