Long-term culture of hepatocytes has been challenged by the loss of differentiated functions. In particular, there is a rapid decline in cytochrome P450 (CYP). In this study, we cocultured rat hepatocytes with 3T3 fibroblasts for 10 days, and examined hepatocyte viability, morphology, and expression of CYP3A. Terfenadine was incubated with the cultures, and its biotransformation was quantitatively analyzed by HPLC. Terfenadine is metabolized by two major pathways: C-hydroxylation to an alcohol metabolite which is further oxidized to a carboxylic acid, and N-dealkylation to azacyclonol. In rat liver, only the N-dealkylation pathway appears to be mediated by CYP3A since anti-rat CYP3A antibody inhibited azacyclonol but not alcohol metabolite formation in incubations of terfenadine with liver microsomes. Freshly isolated rat hepatocytes were seeded on top of confluent 3T3 cells. Cultures were maintained in Williams' E medium supplemented with 10% fetal bovine serum and either 0.1 mumol/L or 5 mumol/L dexamethasone. In pure hepatocyte cultures, viability, as determined by lactate dehydrogenase (LDH) activity, decreased steadily to less than 30% of initial levels by day 10. In cocultures, LDH activity remained high and was 70% of initial levels on day 10. The half-life of terfenadine disappearance was optimally maintained in cocultures treated with 5 mumol/L dexamethasone, and was associated with the increased formation of azacyclonol. On day 5, nearly 50% of added 5 mumol/L terfenadine was converted to azacyclonol within 6 h, whereas the conversion was only 4% on day 1. Western and RNA-slot blot analyses confirmed that treatment with 5 mumol/L dexamethasone induced CYP3A mRNA expression and CYP3A protein expression. This coculture system could offer a useful approach in the study of drugs and xenobiotics metabolized by CYP3A.