Dry eye disease (DED) is a growing public health concern affecting millions of people worldwide and causing ocular discomfort and visual disturbance. Developing its therapeutic drugs based on animal models suffer from interspecies differences and poor prediction of human trials. Here, we established long-term 3D human corneal epithelial organoids, which recapitulated the cell lineages and gene expression signature of the human corneal epithelium. Organoids can be regulated to differentiate ex vivo, but the addition of FGF10 inhibits this process. In the hyperosmolar-induced DED organoid model, the release of inflammatory factors increased, resulting in damage to the stemness of stem cells and a decrease in functional mucin 1 protein. Furthermore, we found that the organoids could mimic clinical drug treatment responses, suggesting that corneal epithelial organoids are promising candidates for establishing a drug testing platform ex vivo. In summary, we established a functional, long-term 3D human epithelial organoid that may serve as an ex vivo model for studying the functional regulation and disease modelling.