Background: Single-cell genomic methods now provide unprecedented resolution for characterizing the component cell types and states of tissues such as the epithelial subsets of the gastrointestinal tract. Nevertheless, functional studies of these subsets at scale require faithful in vitro models of identified in vivo biology. While intestinal organoids have been invaluable in providing mechanistic insights in vitro, the extent to which organoid-derived cell types recapitulate their in vivo counterparts remains formally untested, with no systematic approach for improving model fidelity. Results: Here, we present a generally applicable framework that utilizes massively parallel single-cell RNA-seq to compare cell types and states found in vivo to those of in vitro models such as organoids. Furthermore, we leverage identified discrepancies to improve model fidelity. Using the Paneth cell (PC), which supports the stem cell niche and produces the largest diversity of antimicrobials in the small intestine, as an exemplar, we uncover fundamental gene expression differences in lineage-defining genes between in vivo PCs and those of the current in vitro organoid model. With this information, we nominate a molecular intervention to rationally improve the physiological fidelity of our in vitro PCs. We then perform transcriptomic, cytometric, morphologic and proteomic characterization, and demonstrate functional (antimicrobial activity, niche support) improvements in PC physiology. Conclusions: Our systematic approach provides a simple workflow for identifying the limitations of in vitro models and enhancing their physiological fidelity. Using adult stem cell-derived PCs within intestinal organoids as a model system, we successfully benchmark organoid representation, relative to that in vivo, of a specialized cell type and use this comparison to generate a functionally improved in vitro PC population. We predict that the generation of rationally improved cellular models will facilitate mechanistic exploration of specific disease-associated genes in their respective cell types. Electronic supplementary material The online version of this article (10.1186/s12915-018-0527-2) contains supplementary material, which is available to authorized users