Alagille syndrome (ALGS) is a multisystem developmental disorder characterized by bile duct (BD) paucity, mainly caused by haploinsufficiency of the Notch ligand jagged1. The course of the liver disease is highly variable in ALGS. However, the genetic basis for ALGS phenotypic variability is unknown. Previous studies have reported decreased expression of the transcription factor SOX9 in late embryonic and neonatal livers of Jag1-deficient mice. Here, we investigated the effects of altering the Sox9 gene dosage on the severity of liver disease in an ALGS mouse model. Conditional removal of one copy of Sox9 in Jag1+/- livers impairs the biliary commitment of cholangiocytes and enhances the inflammatory reaction and liver fibrosis. Loss of both copies of Sox9 in Jag1+/- livers further worsens the phenotypes and results in partial lethality. Ink injection experiments reveal impaired biliary tree formation in the periphery of P30 Jag1+/- livers, which is improved by five months of age. Sox9 heterozygosity worsens the P30 biliary tree phenotype and impairs the partial recovery in 5-month-old animals. Notably, Sox9 overexpression improves BD paucity and liver phenotypes in Jag1+/- mice without ectopic hepatocyte-to-cholangiocyte transdifferentiation or long-term liver abnormalities. Notch2 expression in the liver is increased upon Sox9 overexpression, and SOX9 binds the Notch2 regulatory region in the liver. Histological analysis shows a correlation between the level and pattern of SOX9 expression in the liver and outcome of the liver disease in patients with ALGS. Conclusions: Our results establish Sox9 as a dosage-sensitive modifier of Jag1+/- liver phenotypes with a permissive role in biliary development. Our data further suggest that liver-specific increase in SOX9 levels is a potential therapeutic approach for BD paucity in ALGS.