Pharmacokinetic drug interactions can lead to serious adverse events or decreased drug efficacy. The evaluation of a new molecular entity's (NME's) drug-drug interaction potential is an integral part of risk assessment during drug development and regulatory review. Alteration of activities of enzymes or transporters involved in the absorption, distribution, metabolism, or excretion of a new molecular entity by concomitant drugs may alter drug exposure, which can impact response (safety or efficacy). The recent Food and Drug Administration (FDA) draft drug interaction guidance (http://www.fda.gov/downloads/Drugs/GuidanceComplianceRegulatoryInformation/Guidances/ucm072101.pdf) highlights the methodologies and criteria that may be used to guide drug interaction evaluation by industry and regulatory agencies and to construct informative labeling for health practitioner and patients. In addition, the Food and Drug Administration established a "Drug Development and Drug Interactions" website to provide up-to-date information regarding evaluation of drug interactions (http://www.fda.gov/Drugs/DevelopmentApprovalProcess/DevelopmentResources/DrugInteractionsLabeling/ucm080499.htm). This review summarizes key elements in the FDA drug interaction guidance and new scientific developments that can guide the evaluation of drug-drug interactions during the drug development process.