The multifunctional capacity of the liver makes it a central organ in providing sources of energy, carbohydrate, and amino acids to peripheral tissues. Liver is also a site for synthesizing plasma proteins necessary for coagulation apart from synthesizing lipoproteins and bile. The liver is a common site of xenobiotic-induced toxicity; toxic lesions may include necrosis, steatosis, cholestasis, hepatitis (acute and chronic), fibrosis and cirrhosis, and so on. Acute injury is often manifested as depletion of cellular energy, ion deregulation, impaired cellular intermediary metabolism, inhibition of transport functions, and impaired stimulation of tissue repair. The isolated perfused liver models are employed for the studies of xenobiotic metabolism. Liver slices obtained from rat, rabbit, dog, and human are in use for many years as an in vitro tool for biochemical and other studies. A variety of incubation systems are currently available. Precision-cut liver slices have a number of potential advantages over other in vitro techniques available for hepatotoxicity evaluation. Slices maintain tissue architecture so that all cell types are present and intercellular communication between the various cell types is maintained. Methodology for the isolation of high yields of viable hepatocytes from the liver of rodents and other species has been available since 1970. Short-term hepatocyte cultures are discussed. Hepatocyte cultures may be used for extended periods with the maintenance of differentiated functions, such as albumin production. Some of the factors important in establishing long-term hepatocyte culture include exogenous soluble factors, the extracellular matrix and cell-cell interactions. Hepatocyte couplets and hepatocyte spheroids are described. The most commonly used subcellular fraction for xenobiotic metabolism and toxicity studies is the microsomal fraction. Recently, much progress has been made in the development of heterologous expression systems. Some of the computer models developed for the prediction of xenobiotic metabolism and toxicity are METABOLEXPERT, DEREK, and COMPACT.