CYP3A4 is the most abundantly expressed drug-metabolizing P450 enzyme in human liver and contributes to the metabolism of a large number of drugs in use today. CYP3A4 is constitutively expressed in adult hepatocytes but it can also be transcriptionally induced by a variety of structurally diverse xenochemicals. CYP3A4 strongly contributes to the important variability in the therapeutic and toxic effects of drugs owing to the major role it plays in xenobiotic metabolism and the large intra- and inter-individual variability to which it is subjected. The functional examination of up to 13 kb of the CYP3A4 5'-flanking region has revealed that the regulation of this gene is a complex issue, with numerous transcription factors interacting with multiple promoter/enhancer elements. This also suggests that a high degree of human variability in the hepatic CYP3A4 expression could result from regulatory polymorphisms. Several transcription factors and nuclear receptors contribute to the hepatic-specific expression of CYP3A4, including: C/EBPalpha, C/EBPbeta, HNF4alpha, HNF3gamma, CAR and PXR. The induction phenomenon and the down-regulation of CYP3A4 in pathophysiological conditions, such as inflammatory situations, are key processes involved in the toxic vs. therapeutic effects of many drugs. Since CYP3A4 variation may affect the efficacy and toxicity of new drugs, development of reliable hepatic models for the assessment and prediction of the role of CYP3A4 in drug metabolism are important for drug development. Cultured human hepatocytes are the closest model to the human liver as far as CYP3A4 regulation and induction are concerned. However, other hepatic models should be considered in drug development for screening purposes owing to the limited availability of human hepatocytes.