Currently there are three major problems in understanding drug-induced liver injury (DILI): (1) reliably establishing whether the liver disease was caused by the drug, or by another process; (2) determining the true incidence of and clinical risk factors for drug-induced hepatotoxicity; and(3) elaborating the mechanisms by which injury occurs to hepatocytes and other liver cells. We have focused here on the first two problems, as issues that may be amenable to actions in the near future, but the third may take substantially longer to work out. The first problem requires sufficient information for medical differential diagnosis. There are no pathognomonic indicators of DILI; even liver biopsy is not diagnostic. Making the correct attribution of causality requires analyzing the temporal relationship of drug exposure to illness and excluding all other possible causes. The second problem, determining incidence, cannot be done entirely adequately using currently available methods, whether by clinical trials, by spontaneous adverse event reports, or by retrospective epidemiologic studies. There is need for prospective safety studies to establish the true incidence of DILI caused by a drug, to identify risk factors for it, and to collect biologic materials for analytic studies toward better understanding mechanisms of DILI.