Unexpected hepatotoxicity is a major obstacle to drug development, frequently underlying discontinuation of drug development and withdrawal from the market. Drug metabolism and pharmacokinetics are often involved in hepatotoxicity. Therefore, it is necessary to establish in vitro and in vivo models for predicting drug metabolism and related cases of hepatotoxicity. We focused on chimeric mice with humanized liver, consisting predominantly of human hepatocytes. Various human genes, encoding drug-metabolizing enzymes and transporters, are expressed in the liver. These chimeric mice were found to be useful for qualitative and quantitative prediction of human metabolite formation, pharmacokinetics, and drug-drug interactions. They are also useful for predicting hepatotoxicities, such as cholestasis and steatosis. Moreover, fresh hepatocytes isolated from the chimeric mice are useful for in vitro screening. It is possible to compare in vitro and in vivo profiles of the same chimeric mice. One possible drawback could be the contribution of residual mouse hepatocytes and extrahepatic tissues, which may detract from predictability. Recently, novel improved models which overcome these problems have been developed, and increased prediction accuracy is expected.