The combination of co-cultivation of hepatocytes and epithelial cell lines with a newly developed perifusion system was used for in vitro studies on drug metabolism and cytotoxicity. This approach improved the viability and enhanced the induction of the biotransforming capacity of the hepatocytes. As demonstrated for the induction of 7-ethoxyresorufin O-deethylase activity by 3-methylcholanthrene or benzanthracene, co-cultured hepatocytes in the perifusion system responded more sensitively to these inducers than without perifusion, most likely owing to stable (steady-state) concentrations of the inducers under the former conditions and rapidly declining concentrations under the latter conditions. The perifusion approach rendered it possible to determine the kinetics of drug metabolism during single or sequential incubations. After induction with 3-methylcholanthrene and phenobarbital, phase I metabolism of lonazolac to the monohydroxylated product in perifused co-cultures closely (87%) approached the values reported for the in vivo production, whereas in stationary co-cultures only 52% could be reached. Likewise, cytotoxic effects could be detected more precisely in the perifused co-cultures. If cells were pretreated with 0.2 mmol/L galactosamine for 3 h, perifusion with increasing concentrations of menadione differentially killed epithelial RL-ET-14 cells and hepatocytes at low and high concentrations, respectively, while in stationary co-cultures no differential effect was observed and only the higher concentrations were cytotoxic for both cells. Prevention by incubation with S-adenosylmethionine of menadione cytotoxicity up to a menadione concentration of 250 micromol/L was seen only in the perifused co-cultures, whereas in stationary cultures only a slight shift of the cytotoxic concentration exerting 50% cell damage to higher values was noted. These results demonstrate the versatile application of perifused co-cultures for studies on drug metabolism including induction of cytochrome P450-dependent enzymes and steady-state kinetics of biotransformation, as well as cytotoxic and protective effects of different drugs.