Erratic or unpredictable response to drugs remains a challenge of modern drug therapy. An important determinant of such interindividual differences in drug response is variability in the expression of drug-metabolizing enzymes and/or transporters at sites of absorption and/or tissue distribution. Variable drug-metabolizing enzyme and transporter expression can result in unpredictable exposure and tissue distribution of drugs and may manifest as adverse effects or therapeutic failure. In the past decade, important new insights have been made relating to the regulatory mechanisms governing the expression of drug-metabolizing enzymes and transporters by ligand-activated nuclear receptors. Specifically, there is compelling evidence to demonstrate that PXR, CAR, FXR, LXR, VDR, HNF4alpha, and AhR form a battery of nuclear receptors that regulate the expression of many important drug-metabolizing enzyme and transporters. In this review, the authors focus on clinically important drug-metabolizing enzymes such as CYP3A4, CYP2B6, CYP2C9, CYP2C19, UGT1A1, SULT2A1, and glutathione S-transferases and their regulation by nuclear receptors. They also review the nuclear receptor-mediated regulation of drug transporters such as MDR1, MRP2, MRP4, BSEP, BCRP, NTCP, OATP1B3, and OATP1A2. Finally, they outline how the drug development process has been affected by the current understanding of the involvement of nuclear receptors in the regulation of drug disposition genes.