Although in vitro transport/inhibition studies are commonly performed on impure drug candidates to screen for pharmacokinetic properties in early development, quantitative guidelines concerning acceptable impurity levels are lacking. The broad goal was to derive models for the effect of impurity on transport and inhibition studies and identify the maximum allowable impurity level that does not bias assay results. Models were derived, and simulations were performed to assess the impact of impurity on substrate properties K t and J max and inhibition K i . Simulation results were experimentally challenged with a known amount of impurity, using the intestinal bile acid transporter as a model system. For substrate uptake studies, glycocholate served as substrate and was contaminated with either a very strong, strong, or moderate impurity (i.e., taurolithocholate, chenodeoxycholate, or ursodeoxycholate, respectively). For inhibition studies, taurocholate and glycocholate together was the substrate/inhibitor pair, where glycocholate was contaminated with taurolithocholate. There was high agreement between simulation results and experimental observations. It is not surprising that, in the inhibition assay, potent impurity caused test compound to appear more potent than the true potency of the test compound (i.e., reduced inhibitory K i ). However, results in the transport scenario surprisingly indicated that potent impurity did not diminish test compound potency but, rather, increased substrate potency (i.e., reduced Michaelis-Menten substrate K t ). In general, less than 2.5% impurity is a reasonable target, provided the impurity is less than 10-fold more potent than test compound. Study results indicate that careful consideration of possible impurity effect is needed when quantitative structureactivity relationship analysis cannot explain high compound potency from transport or inhibition studies.Transport and inhibition studies are routinely performed in early development to screen for absorption, distribution, metabolism, and excretion (ADME). For example, a current project in our laboratory concerns the targeting of an intestinal transporter for drug delivery purposes (Balakrishnan and Polli, 2006). The transporter is the human apical sodium-dependent bile acid transporter (hASBT). ADME considerations in this project motivate the screening for substrates and inhibitors of hASBT to construct a quantitative structure-activity relationship (QSAR) model for inhibitors and substrates of this transporter. Test compounds are currently being synthesized to evaluate the chemical structural features that allows for hASBT inhibition, as well as translocation by hASBT (Balakrishnan et al., 2006a).However, test compounds in early development often contain chemical impurities, including intermediates that bear structural similarity to the target test compound. The presence of such impurities has potential to affect the results of pharmacologic assays, including ADME screening results. Guidelines on compound purity are n...