Variability in supply, paucity of donors and cellular instability under in vitro conditions have limited the application of primary human hepatocytes (PHHs) to hepatotoxicity testing. Therefore, alternative sources have been sought for functional liver cells. Many of the earlier in vitro hepatotoxicity studies were carried out using hepatoma-derived cell lines. These cell lines have overcome some of the limitations of PHHs with regard to phenotypic stability and availability; however, they suffer from their own inherent limitations, such as the lack of drug-metabolizing functionality, which renders them inadequate for situations where toxic metabolite formation of the parent drug occurs. In the last decade we have witnessed a burgeoning interest of the research community in using hepatocyte-like cells (HLCs) derived from human induced pluripotent stem cells (iPSCs) as in vitro hepatotoxicity models. HLCs offer the perspective of a defined and renewable supply of functional hepatocytes; more importantly, HLCs maintain their original donor genotype and afford donor diversity, thus opening new avenues to patient-specific toxicity testing. In this review, we first introduce various in vitro hepatotoxicity models, then focus on HLCs and their application in hepatotoxicity studies, and finally offer some perspectives on future developments of the field.