Interactions between co-administered medicines can reduce efficacy or lead to adverse effects. Understanding and managing such interactions is essential in bringing safe and effective medicines to the market. Ideally, interaction potential should be recognized early and minimized in compounds that reach late stages of drug development. Physiologically based pharmacokinetic models combine knowledge of physiological factors with compound-specific properties to simulate how a drug behaves in the human body. These software tools are increasingly used during drug discovery and development and, when integrating relevant in vitro data, can simulate drug interaction potential. This article provides some background and presents illustrative examples. Physiologically based models are an integral tool in the discovery and development of drugs, and can significantly aid our understanding and prediction of drug interactions.