The liver is the primary site of metabolism for most drugs. Its major roles include detoxification of the systemic and portal blood, and production and secretion of critical blood and biliary components. A number of liver-derived in vitro systems, such as slices, primary and immortalized hepatocytes, microsomes and S9 fractions are used to assess the metabolism and potential toxicity of new chemical entities. Over the past decade, primary hepatocytes have become a standard in vitro tool to evaluate hepatic drug metabolism, cytochrome P450 (P450) induction, and drug interactions affecting hepatic metabolism. While earlier, hepatocytes were used in suspension for metabolic stability evaluations, more recent studies have demonstrated the added value of using these over longer terms in primary culture. Primary hepatocyte cultures are particularly useful in the evaluation of low turn-over compounds. Hepatic transporter studies are recommended for drug candidates that are predominantly eliminated through the bile. An appropriate strategy is to use primary hepatocytes to assess uptake, followed by singly transfected cell lines to identify the specific transporter(s) involved. Primary hepatocytes can also be used to assess biliary clearance to enable improved hepatic clearance predictions. Newer technologies such as siRNA can be used to knock out specific transporters for more predictive evaluations of potential clinically-based drug-drug interactions. In vitro safety (toxicology) studies have historically been conducted using cell lines. There is increasing evidence that co-cultures of primary hepatocytes and Kupffer cells would be more predictive of the in vivo outcome, as this system provides the complete complement of drug metabolizing enzymes, transcription factors and cytokines necessary to get a more in vivo-like toxicological response. In this review, we will discuss standard and novel in vitro approaches for using primary hepatocytes to extrapolate clinical hepatic metabolism, transport and toxicity.