The hippocampus is a brain structure that plays an essential role in memory and learning. Impairments in these cognitive functions are associated with neurodevelopmental disorders, such as intellectual disability and epilepsy. However, the cellular and molecular processes underlying these functions remain largely unknown. Stem cell-derived 3D organoids provide an invaluable opportunity to expand our understanding of the human hippocampus’s complex cellular and functional networks in health and disease. By exposing pluripotent stem cell-derived telencephalic progenitors to dorso-caudal patterning signals, we established a new 3D organoid model for long-term hippocampal development in vitro. Single-cell RNA sequencing of individual organoids cultured for 1, 3, and 6 months showed high organoid-to-organoid reproducibility and a stronger correlation with foetal hippocampal tissue compared to other human brain regions between 14 and 27 GWs. The gene expression profile of cell types observed in organoids also reveals a region-specific and time-dependent appearance that aligns with those found in developing human foetal hippocampal tissue. Indeed, a significant correlation for progenitor cells is shown during the early differentiation stage, while more mature and specialised cells, such as interneurons, astrocytes, oligodendrocytes, pyramidal, and granule cells, are observed at later times, demonstrating that the new model closely resembles the cellular composition of the developing hippocampus. Using long-read single-cell sequencing, we investigated the diversity of transcript isoforms during hippocampal organoid differentiation, further elucidating molecular factors involved in hippocampal development. Finally, we assessed neuronal connectivity and network dynamics in 3D space during hippocampal organoid differentiation, leveraging a non-invasive and high-throughput microelectrode array system. As time progresses and further cellular complexity is reached, a more intricate neuronal network emerges, recapitulating the functional timeline of embryonic brain development. This new 3D model provides a valuable platform to investigate how the human hippocampus develops and identify the pathophysiological mechanisms of neurological disorders affecting this brain region.