Induction of drug-clearance pathways (Phase 1 and 2 enzymes and transporters) can have important clinical consequences. Inducers can (1) increase the clearance of other drugs, resulting in a decreased therapeutic effect, (2) increase the activation of pro-drugs, causing an alteration in their efficacy and pharmacokinetics, and (3) increase the bioactivation of drugs that contribute to hepatotoxicity via reactive intermediates. Nuclear receptors are key mediators of drug-induced changes in the expression of drug-clearance pathways. However, species differences in nuclear receptor activation make the prediction of cytochrome P450 (CYP) induction in humans from data derived from animal models problematic. Thus, in vitro human-relevant model systems are increasingly used to evaluate enzyme induction. In this review, the authors' current understanding of the mechanisms of enzyme induction and the in vitro methods for assessing the induction potential of new drugs will be discussed. Relevant issues and considerations surrounding proper study design and the interpretation of in vitro results will be discussed in light of the current US Food and Drug Administration (FDA) recommendations.