A plethora of in vitro bioassays are developed in the context of chemical risk assessment and clinical diagnostics to test effects on different biological processes. Such assays can also be implemented in effect-based monitoring (EBM) of (drinking) water quality alongside chemical analyses. Effects-based monitoring can provide insight into risks for the environment and human health associated with exposure to (unknown) complex, low-level mixtures of micropollutants, which fits in the risk-based approach that was recently introduced in the European Drinking Water Directive. Some challenges remain, in particular those related to selection and interpretation of bioassays. For water quality assessment, carcinogenesis, adverse effects on reproduction and development, effects on xenobiotic metabolism, modulation of hormone systems, DNA reactivity, and adaptive stress responses are considered the most relevant toxicological endpoints. An evaluation procedure of the applicability and performance of in vitro bioassays for water quality monitoring, based on existing information, has been developed, which can be expanded with guidelines for experimental evaluations. In addition, a methodology for the interpretation of in vitro monitoring data is required, because the sensitivity of specific in vitro bioassays in combination with sample concentration may lead to responses of chemicals (far) below exposure concentrations that are relevant for human health effects. Different approaches are proposed to derive effect-based trigger values (EBTs), including EBTs based on (1) relative ecotoxicity potency, (2) health-based threshold values for chronic exposure in humans and kinetics of reference chemicals, and (3) read-across from (drinking) water guideline values. Effects-based trigger values need to be chosen carefully in order to be sufficiently but not overly conservative to indicate potential health effects. Consensus on the crucial steps in the selection and interpretation of in vitro bioassay data will facilitate implementation and legal embedding in the context of water quality monitoring of such assays in EBM strategies. Integr Environ Assess Manag 2018;00:000-000. © 2018 The Authors. Integrated Environmental Assessment and Management published by Wiley Periodicals, Inc. on behalf of Society of Environmental Toxicology & Chemistry (SETAC).