Mice that have been genetically humanized for proteins involved in drug metabolism and toxicity and mice engrafted with human hepatocytes are emerging and promising in vivo models for an improved prediction of the pharmacokinetic, drug–drug interaction and safety characteristics of compounds in humans. The specific advantages and disadvantages of these models should be carefully considered when using them for studies in drug discovery and development. Here, an overview on the corresponding genetically humanized and chimeric liver humanized mouse models described to date is provided and illustrated with examples of their utility in drug metabolism and toxicity studies. We compare the strength and weaknesses of the two different approaches, give guidance for the selection of the appropriate model for various applications and discuss future trends and perspectives.