Drug-induced hepatotoxicity is a major reason for withdrawal of drugs from development as well as from the market. A major problem predicting hepatotoxicity is the lack of suitable predictive in vitro system. Drug-induced hepatotoxicity is usually associated with the recruitment of immune cells to the liver accelerating an inflammatory response often initiated by activation of the Kupffer cells. In order to evaluate whether the introduction of inflammatory cells could increase the sensitivity for drug-induced cytotoxicity we developed an in vitro co-culture system based on two human cell lines; a hepatoma (Huh-7) and monocytic (THP-1) cell line. As model drugs we chose two peroxisome proliferator activated receptor gamma (PPAR gamma) agonists, the hepatotoxic troglitazone and the non-hepatotoxic rosiglitazone. In the co-cultures, troglitazone caused an enhanced cytotoxicity as compared to single cultures of either cell line, whereas little cytotoxicity was seen after treatment with rosiglitazone. Troglitazone treatment increased gene expression of pro-inflammatory mediators and stress-related genes in both cell types, which in general was more pronounced in co-cultures than in single cell cultures. Based on these results we suggest that co-cultures of human hepatoma cells and monocytes might provide an important in vitro system for better prediction of cytotoxicity mediated by potential hepatotoxins.