Drug-induced liver injury is an important clinical problem with significant morbidity and mortality. Whereas for most hepatocellular forms of drug-induced hepatic injury the underlying pathophysiological mechanism is poorly understood, there is increasing evidence that cholestatic forms of drug-induced liver damage result from a drug- or metabolite-mediated inhibition of hepatobiliary transporter systems. In addition to their key role in determining hepatic drug exposure and clearance, the coordinated action of these transport systems is essential for bile formation and the biliary secretion of cholephilic compounds and xenobiotics. Any drug-mediated functional disturbance of these processes can lead to an intracellular accumulation of potentially harmful bile constituents and result in the development of cholestatic liver cell damage. In addition to direct drug-mediated inhibition of hepatocellular transport, function of these transporters can be altered by pre-existing hepatic disease and genetic factors, which contribute to the development of drug-induced cholestasis in susceptible individuals. This review summarizes current knowledge about the function of hepatobiliary uptake and efflux systems and discusses factors that might predispose to drug-induced cholestasis.