Preclinical studies in animal models are used routinely during drug development, but species differences of pharmacokinetics (PK) between animals and humans have to be taken into account in interpreting the results. Human hepatocytes are also widely used to examine metabolic activities mediated by cytochrome P450 (P450) and other enzymes, but such in vitro metabolic studies also have limitations. Recently, chimeric mice with humanized liver (h-chimeric mice), generated by transplantation of human donor hepatocytes, have been developed as a model for the prediction of metabolism and PK in humans, using both in vitro and in vivo approaches. The expression of human-specific metabolic enzymes and metabolic activities was confirmed in humanized liver of h-chimeric mice with high replacement ratios, and several reports indicate that the profiles of P450 and non-P450 metabolism in these mice adequately reflect those in humans. Further, the combined use of h-chimeric mice and r-chimeric mice, in which endogenous hepatocytes are replaced with rat hepatocytes, is a promising approach for evaluation of species differences in drug metabolism. Recent work has shown that data obtained in h-chimeric mice enable the semi-quantitative prediction of not only metabolites, but also PK parameters, such as hepatic clearance, of drug candidates in humans, although some limitations remain because of differences in the metabolic activities, hepatic blood flow and liver structure between humans and mice. In addition, fresh h-hepatocytes can be isolated reproducibly from h-chimeric mice for metabolic studies.