Hepatic and cardiac drug adverse effects are among the leading causes of attrition in drug development programs, in part due to predictive failures of current animal or in vitro models. Hepatocytes and cardiomyocytes differentiated from human induced pluripotent stem cells (iPSCs) hold promise for predicting clinical drug effects, given their human-specific properties and their ability to harbor genetically determined characteristics that underlie inter-individual variations in drug response. Currently, the fetal-like properties and heterogeneity of hepatocytes and cardiomyocytes differentiated from iPSCs make them physiologically different from their counterparts isolated from primary tissues and limit their use for predicting clinical drug effects. To address this hurdle, there have been ongoing advances in differentiation and maturation protocols to improve the quality and use of iPSC-differentiated lineages. Among these are in vitro hepatic and cardiac cellular microsystems that can further enhance the physiology of cultured cells, can be used to better predict drug adverse effects, and investigate drug metabolism, pharmacokinetics, and pharmacodynamics to facilitate successful drug development. In this article, we discuss how cellular microsystems can establish microenvironments for these applications and propose how they could be used for potentially controlling the differentiation of hepatocytes or cardiomyocytes. The physiological relevance of cells is enhanced in cellular microsystems by simulating properties of tissue microenvironments, such as structural dimensionality, media flow, microfluidic control of media composition, and co-cultures with interacting cell types. Recent studies demonstrated that these properties also affect iPSC differentiations and we further elaborate on how they could control differentiation efficiency in microengineered devices. In summary, we describe recent advances in the field of cellular microsystems that can control the differentiation and maturation of hepatocytes and cardiomyocytes for drug evaluation. We also propose how future research with iPSCs within engineered microenvironments could enable their differentiation for scalable evaluations of drug effects. Impact statement Cardiac and hepatic adverse drug effects are among the leading causes of attrition in preclinical and clinical drug development programs as well as marketing withdrawals. The insufficiency of animal testing models has led to considerable interest in the employment of cardiac and hepatic models using human-induced pluripotent stem cells (iPSCs) for drug toxicity testing. However, current batches of iPSC-derived cardiomyocytes and hepatocytes are variable and not matured as adult primary tissues, which limit their prediction of drug effects. This article discusses how the use of microfluidics can create microenvironments to better control differentiation protocols and increase the physiological relevance of iPSC-derived cardiomyocytes and hepatocytes. Development and standardization of technologies will enable evaluation of the potential value of cellular microsystems to improve the in vitro models used in drug development programs. Future steps in this field include controlled connections of organ systems to better recreate clinical metabolism and pharmacokinetics.