OBJECTIVE A case example is presented in which the physiologically based modeling approach has been used to model the absorption of a lipophilic BCS Class II compound predominantly metabolized by CYP3A4, and to assess the interplay of absorption related parameters with the drug-drug interaction (DDI) potential. METHODS The PBPK model was built in the rat using Gastroplus® to study the absorption characteristics of the compound. Subsequently relevant model parameters were used to predict the non-linear human PK observed during first-in-human study after optimizing the absorption model for colonic absorption, bile micelle solubilization and unbound fraction in gut enterocytes (fu(gut)) using SIMCYP® simulator. The model fitted absorption parameters were then used to assess the drug-drug interaction (DDI) potential of the test compound when administered along with multiple doses of a potent CYP 3A4 inhibitor, ketoconazole. The impact of fu(gut) in the extent of DDI was assessed using parameter sensitivity analysis. CONCLUSIONS After optimizing the preclinical model and taking into consideration bile micelle solubilization and colonic absorption, the non-linear pharmacokinetics of the test compound was satisfactorily predicted in man. Sensitivity analysis performed with the absorption parameter fu(gut) indicated that it could be an important parameter in predicting oral absorption. In addition, DDI simulations using SIMCYP® suggest that C(max) and AUC ratios may also be sensitive to the fu(gut) input in the model. Since fu(gut) cannot be measured experimentally, sensitivity analysis may help in assessing the importance of fu(gut) in human PK and DDI prediction using SIMCYP®.