Animal models are used commonly in various stages of drug discovery and development to aid in the prospective assessment of drug-drug interaction (DDI) potential and the understanding of the underlying mechanism for DDI of a drug candidate. In vivo assessments in an appropriate animal model can be very valuable, when used in combination with in vitro systems, to help verify in vivo relevance of the in vitro animal-based results, and thus substantiate the extrapolation of in vitro human data to clinical outcomes. From a pharmacokinetic standpoint, a key consideration for rational selection of an animal model is based on broad similarities to humans in important physiological and biochemical parameters governing drug absorption, distribution, metabolism or excretion (ADME) processes in question for both the perpetrator and victim drugs. Equally critical are specific in vitro and/or in vivo experiments to demonstrate those similarities, usually both qualitative and quantitative, in the ADME properties/processes under investigation. In this review, theoretical basis and specific examples are presented to illustrate the utility of the animal models in assessing the potential and understanding the mechanisms of DDIs.