The cytochrome CYP3A gene products, expressed in mammalian liver, are essential for the metabolism of lipophilic substrates, including endogenous steroid hormones and prescription drugs. CYP3A enzymes are extremely versatile and are inducible by many of their natural and xenobiotic substrates. Consequently, they form the molecular basis for many clinical drug-drug interactions. The induction of CYP3A enzymes is species-specific, and we have postulated that it involves one or more cellular factors, or receptor-like xeno-sensors. Here we identify one such factor unequivocally as the nuclear receptor pregnenolone X receptor (PXR) and its human homologue, steroid and xenobiotic receptor (SXR). We show that targeted disruption of the mouse PXR gene abolishes induction of CYP3A by prototypic inducers such as dexamethasone or pregnenolone-16alpha-carbonitrile. In transgenic mice, an activated form of SXR causes constitutive upregulation of CYP3A gene expression and enhanced protection against toxic xenobiotic compounds. Furthermore, we show that the species origin of the receptor, rather than the promoter structure of CYP3A genes, dictates the species-specific pattern of CYP3A inducibility. Thus, we can generate 'humanized' transgenic mice that are responsive to human-specific inducers such as the antibiotic rifampicin. We conclude that SXR/PXR genes encode the primary species-specific xeno-sensors that mediate the adaptive hepatic response, and may represent the critical biochemical mechanism of human xenoprotection.