Because drug-induced liver injury is one of the main reasons for drug development failures, it is important to perform drug toxicity screening in the early phase of pharmaceutical development. Currently, primary human hepatocytes are most widely used for the prediction of drug-induced liver injury. However, the sources of primary human hepatocytes are limited, making it difficult to supply the abundant quantities required for large-scale drug toxicity screening. Therefore, there is an urgent need for a novel unlimited, efficient, inexpensive, and predictive model which can be applied for large-scale drug toxicity screening. Human embryonic stem (ES) cells and induced pluripotent stem (iPS) cells are able to replicate indefinitely and differentiate into most of the body's cell types, including hepatocytes. It is expected that hepatocyte-like cells generated from human ES/iPS cells (human ES/iPS-HLCs) will be a useful tool for drug toxicity screening. To apply human ES/iPS-HLCs to various applications including drug toxicity screening, homogenous and functional HLCs must be differentiated from human ES/iPS cells. In this review, we will introduce the current status of hepatocyte differentiation technology from human ES/iPS cells and a novel method to predict drug-induced liver injury using human ES/iPS-HLCs.