Drugs are usually biotransformed into new chemical species that may have either toxic or therapeutic effects. Drug metabolism studies are routinely performed in laboratory animals but, due to metabolic interspecies differences when compared to man, they are not accurate enough to anticipate the metabolic profile of a drug in humans. Human hepatocytes in primary culture provide the closest in vitro model to human liver and the only model that can produce a metabolic profile of a given drug that is very similar to that found in vivo. However their availability is limited due to the restricted access to suitable tissue samples. The scarcity of human liver has led to optimising the cryopreservation of adult hepatocytes for long-term storage and regular supply. Human hepatocytes in primary culture express typical hepatic functions and express drug metabolising enzymes. Moreover, qualitative and quantitative similarities between in vitro and in vivo metabolism of drugs were observed. Different strategies have been envisaged to prolong cell survival and delay the spontaneous decay of the differentiated phenotype during culture. Thus, hepatocytes represent the most appropriate model for the evaluation of integrated drug metabolism, toxicity/metabolism correlations, mechanisms of hepatotoxicity, and the interactions (inhibition and induction) of xenobiotics and drug-metabolising enzymes. However, in view of limitations of primary hepatocytes, efforts are made to develop alternative cellular models (i.e. metabolic competent CYP-engineered cells stably expressing individual CYPs and transient expression of CYPs by transduction of hepatoma cells with recombinant adenoviruses). In summary, several cellular tools are available to address key issues at the earliest stages of drug development for a better candidate selection and hepatotoxicity risk assessment.