Liver parenchyma shows a remarkable heterogeneity of the hepatocytes along the porto-central axis with respect to ultrastructure and enzyme activities resulting in different cellular functions within different zones of the liver lobuli. According to the concept of metabolic zonation, the spatial organization of the various metabolic pathways and functions forms the basis for the efficient adaptation of liver metabolism to the different nutritional requirements of the whole organism in different metabolic states. The present review summarizes current knowledge about this heterogeneity, its development and determination, as well as about its significance for the understanding of all aspects of liver function and pathology, especially of intermediary metabolism, biotransformation of drugs and zonal toxicity of hepatotoxins.