Hepatotoxicity is an enormous and increasing problem for the pharmaceutical industry. Early detection of problems during the drug discovery pathway is advantageous to minimize costs and improve patient safety. However, current cellular models are sub-optimal. This review addresses the potential use of pluripotent stem cells in the generation of hepatic cell lineages. It begins by highlighting the scale of the problem faced by the pharmaceutical industry, the precise nature of drug-induced liver injury and where in the drug discovery pathway the need for additional cell models arises. Current research is discussed, mainly for generating hepatocyte-like cells rather than other liver cell-types. In addition, an effort is made to identify where some of the major barriers remain in translating what is currently hypothesis-driven laboratory research into meaningful platform technologies for the pharmaceutical industry. © 2010 Elsevier B.V. All rights reserved.