Recent studies have clearly demonstrated that the hepatocyte requires a complex and well defined environment to survive and maintain differentiated functions in vitro. Soluble factors as well as cell-matrix and cell-cell interactions have been found to affect markedly hepatocyte functions. Thus co-culturing hepatocytes with another rat liver cell type results in a prolonged expression of liver functions including phase I and phase II drug-metabolizing enzymes. Addition of corticosteroids to the co-culture medium is a prerequisite, and accumulation of insoluble matrix components is observed within a few days primarily between the two cell types. Hepatocyte cultures have been widely used for pharmacology and toxicology studies during recent years, but most studies deal with short-term investigations. Although specific functions are not completely stabilized the use of long-term hepatocyte cultures represents a promising tool to investigate enzyme induction and inhibition, and drug chronic toxicity.