Cytochrome P450 3A4 (CYP3A4) is a major determinant of the metabolism of many drugs, including important anticancer drugs, with sometimes profound impact on therapeutic efficacy and toxic side effects. To study in vivo CYP3A(4) functions, we have generated and characterized transgenic mice with functional expression of human CYP3A4 cDNA in the liver. Two transgenic lines displayed substantial, physiologically relevant and stable CYP3A4 levels in liver and moderate levels in kidney, but not in small intestine. The mice did not display obvious physiological abnormalities. The CYP3A4 substrate drugs midazolam and cyclosporin A were used to test functional activity of CYP3A4 in liver. The area under the plasma concentration versus time curve (AUC) of intravenously administered midazolam (30 mg/kg) was 2.2-fold decreased in the transgenic mice compared with wild-type (5.45 ± 0.21 versus 11.7 ± 0.46 μg · hml^–1; P < 0.01), and early formation of the primary metabolite 1-hydroxymidazolam was about 2-fold increased, demonstrating the functionality of CYP3A4 in the liver. Similarly, following intravenous administration of cyclosporin A (20 mg/kg), CYP3A4 transgenic mice displayed a reduced plasma AUC compared with wild-type (24.3 ± 0.66 versus 35.8 ± 0.53 μg · hml^{– 1}; P < 0.01). Thus, midazolam and cyclosporin A, compounds with markedly different clearance rates and half-lives, both demonstrated clearly accelerated kinetics in the CYP3A4 transgenic mice. We expect that this CYP3A4 transgenic model will provide a useful tool to study the impact of CYP3A4 on drug levels, especially when combined with other transgenic and knockout strains.