A human pregnane X receptor (PXR) reporter-gene assay was established and validated using 19 therapeutic agents known to be clinical CYP3A4 inducers, 5 clinical non-inducers, and 6 known inducers in human hepatocytes. The extent of CYP3A4 induction (measured as RIF ratio in comparison to rifampicin) and EC50 was obtained from the dose-response curve. All of the clinical inducers (19/19) and human hepatocyte inducers (6/6) showed positive responses in the PXR assay. One out of five clinical non-inducers, pioglitazone, also showed a positive response. An additional series of 18 commonly used drugs with no reports of clinical induction was also evaluated as putative negative controls. Sixteen of these were negative (89%), whereas two of these, flutamide and haloperidol showed 16-fold (RIF ratio 0.79) and 10-fold (RIF ratio 0.48) maximal induction, respectively in the reporter-gene system. Flutamide and haloperidol were further demonstrated to cause CYP3A4 induction in human cryopreserved hepatocytes based on testosterone 6beta-hydroxylation activity. The induction potential index calculated based on the maximum RIF ratio, EC50, and in vivo maximum plasma concentration was used to predict the likelihood of CYP3A4 induction in humans. When the induction potential index is greater than 0.08, the compound is likely to cause induction in humans. A high-throughput screening strategy was developed based on the validation results at 1microM and 10microM for the same set of drugs. A RIF ratio of 0.4 was set as more practical screening cut-off to minimize the possibility of generating false positives. Thus, a tiered approach was implemented to use the human PXR reporter-gene assay from early lead optimization to late lead characterization in drug discovery.