Primary human hepatocytes are extensively used to study the potential of drugs to induce cytochrome P450 (CYP). However, the activities of these enzymes decrease rapidly during culture. Previously we reported that in a layered co-culture system with HepG2 and bovine endothelial cells, the expression levels of various CYP genes were significantly increased compared with the monolayer cultured HepG2 cells. Here, we examined the induction of CYP gene expression by an inducer by examining the effect of phenobarbital treatment on CYP gene expression in the co-culture system. In the layered co-cultured HepG2, expression of the CYP2C and CYP3A family genes was induced by phenobarbital treatment. We also detected CYP3A4 enzyme induction using this co-culture system. Moreover, the induction of hepatic drug transporters by phenobarbital was detected. These results suggest that functional regulation of the CYP and transporter gene pathway is retained in these layered co-cultured cells. Thus, this system may serve as a useful model for in vitro pharmacological studies on the coordinated regulation of transport and metabolism.