In vitro models derived from various animal species are routinely used for the evaluation of pharmacological potency and toxicological potential of new drug candidates. It is well known that metabolism of the drug molecule often contributes to the efficacy and toxicity observed in vivo. In vitro metabolism studies conducted in biological matrixes ranging from intact organ, tissue slice to subcellular fraction offer the advantage of reduced complexity of the study system, and allow the evaluation of intrinsic metabolic potential or mechanism with respect to a specific reaction. In addition, in vitro systems derived from various animal species offer the possibility of comparing metabolic pathways among species, including humans, before a compound can be tested clinically. Two areas of particular interest for the use of in vitro studies in the understanding of new drugs are 1) the relationship of metabolic pathway and pharmacodynamics and 2) the prediction of drug interaction potential in humans. To illustrate these aspects, I review metabolism studies on losartan, an angiotensin-II receptor antagonist currently in phase-III clinical development for hypertension, and cyclosporin A, a widely prescribed immunosuppressant.