Marked species differences exist in P450 expression and activities. In order to produce mouse models that can be used to more accurately predict human drug and carcinogen metabolism, P450‐ and xenobiotic receptor humanized mice are being prepared using bacterial artificial chromosomes (BAC) and P1 phage artificial chromosomes (PAC) genomic clones. In some cases, transgenic mice carrying the human genes are bred with null‐mice to produce fully humanized mice. Mice expressing human CYP1A1, CYP1A2, CYP2E1, CYP2D6, CYP3A4, and CYP3A7 were generated and characterized. Studies with the CYP3A4‐humanized (hCYP3A4) mouse line revealed new information on the physiological function of this P450 and its role in drug metabolism in vivo. With this mouse line, CYP3A4, under certain circumstances, was found to alter the serum levels of estrogen resulting in deficient lactation and low pup survival as a result of underdeveloped mammary glands. This hCYP3A4 mouse established the importance of intestinal CYP3A4 in the pharmacokinetics of orally administered drugs. The hCYP3A4 mice were also used to establish the mechanisms of potential gender differences in CYP3A4 expression (adult female > adult male) that could account for human gender differences in drug metabolism and response. The pregnane X receptor (PXR) is also involved in induction of drug metabolism through its target genes including CYP3A4. Since species differences exist in ligand specificity between human and mice, a PXR‐humanized mouse (hPXR) was produced that responds to human PXR activators such as rifampicin but does not respond to the rodent activator pregnenalone 16α‐carbonitrile.