Tolvaptan is a selective vasopressin V2 receptor antagonist, approved in several countries for the treatment of hyponatremia and autosomal dominant polycystic kidney disease (ADPKD). No liver injury has been observed with tolvaptan treatment in healthy subjects and in non-ADPKD indications, but ADPKD clinical trials showed evidence of drug-induced liver injury (DILI). Although all DILI events resolved, additional monitoring in tolvaptan-treated ADPKD patients is required. In vitro assays identified alterations in bile acid disposition and inhibition of mitochondrial respiration as potential mechanisms underlying tolvaptan hepatotoxicity. This report details the application of DILIsym software to determine whether these mechanisms could account for the liver safety profile of tolvaptan observed in ADPKD clinical trials. DILIsym simulations included physiologically based pharmacokinetic estimates of hepatic exposure for tolvaptan and2 metabolites, and their effects on hepatocyte bile acid transporters and mitochondrial respiration. The frequency of predicted alanine aminotransferase (ALT) elevations, following simulated 90/30 mg split daily dosing, was 7.9% compared with clinical observations of 4.4% in ADPKD trials. Toxicity was multifactorial as inhibition of bile acid transporters and mitochondrial respiration contributed to the simulated DILI. Furthermore, simulation analysis identified both pre-treatment risk factors and on-treatment biomarkers predictive of simulated DILI. The simulations demonstrated that in vivo hepatic exposure to tolvaptan and the DM-4103 metabolite, combined with these 2 mechanisms of toxicity, were sufficient to account for the initiation of tolvaptan-mediated DILI. Identification of putative risk-factors and potential novel biomarkers provided insight for the development of mechanism-based tolvaptan risk-mitigation strategies.