To develop new drugs with high efficacy and safety, it is important to predict the pharmacological, toxicological, and pharmacokinetic profiles of drug candidates in humans. Chimeric mice with a humanized liver are mice in which human hepatocytes have been transplanted, such that mouse liver cells are replaced with human hepatocytes; these mice have been used as prediction models. Studies performed thus far indicate that chimeric mice with a humanized liver can be used for the prediction of human-specific metabolite formation and plasma concentration-time curves for several drugs. Furthermore, studies advocate the utility of chimeric mice with a humanized liver for modelling drug-induced hepatotoxicity and disease such as hepatitis virus infection in safety and pharmacological evaluations respectively. Taken together, these findings indicate that chimeric mice with a humanized liver can be used to evaluate the relationship between pharmacokinetics, toxicity, and efficacy; the contribution by active metabolites may also be assessed. In recent years, new and improved animal models have been developed to overcome the disadvantages of chimeric mice with a humanized liver. It is expected that their usefulness for optimization of drug candidates and translational research in drug discovery and development will further increase.