In pharmacological research the development of promising lead compounds requires a detailed understanding of the dynamics of disease progression. However, for many diseases, such as kidney fibrosis, gaining such understanding requires complex real-time, multi-dimensional analysis of diseased and healthy tissue. To allow for such studies with increased throughput we established a dextran hydrogel-based in vitro 3D co-culture as a disease model for kidney fibrosis aimed at the discovery of compounds modulating the epithelial/mesenchymal crosstalk. This platform mimics a simplified pathological renal microenvironment at the interface between tubular epithelial cells and surrounding quiescent fibroblasts. We combined this 3D technology with epithelial reporter cell lines expressing fluorescent biomarkers in order to visualize pathophysiological cell state changes resulting from toxin-mediated chemical injury. Epithelial cell damage onset was robustly detected by image-based monitoring, and injured epithelial spheroids induced myofibroblast differentiation of co-cultured quiescent human fibroblasts. The presented 3D co-culture system therefore provides a unique model system for screening of novel therapeutic molecules capable to interfere and modulate the dialogue between epithelial and mesenchymal cells.