Primary cultures of human hepatocytes have been used extensively by both academic and industrial laboratories for evaluating the hepatic disposition of drugs and other xenobiotics. Their primary utility has been for assessing the induction potential of new chemical entities (NCEs) and they continue to serve as the gold standard. Primary considerations for conducting in vitro drug testing utilizing cultures of human hepatocytes, such as the effects of culture and study conditions, are discussed. The maintenance of normal cellular physiology and intercellular contacts in vitro is of particular importance for optimal phenotypic gene expression and response to drugs and other xenobiotics. Significant advances in our understanding of cytochrome P450 (CYP450) enzyme regulation have been made with the recent identification of the nuclear receptors mediating the induction of CYP2B and CYP3A enzymes. In particular, the activation of pregnane X receptor (PXR) by prototypical inducers of CYP3A has been found to correlate well with the species-specific modulation of CYP3A by various drugs and other xenobiotics. Concomitant with the discovery of PXR has been the identification of compounds that may act synergistically or antagonistically on multiple receptors (e.g., co-repressors and/or co-activators of the receptor) introducing novel mechanisms of drug-drug interactions. Differential expression of the individual isoforms of the major CYP450 enzymes over time in culture suggest that this model system is not reflective of in vivo profiles and, therefore, may be limited in its application for drug metabolism studies. Overall, primary cultures of human hepatocytes can serve as a sensitive and selective model for predicting the regulation of CYP450 modulation by drugs and other xenobiotics. Considerations and recommendations for standardizing testing conditions and choosing relevant endpoint(s) are presented.