Knowledge of free drug intracellular concentration is necessary to predict the impacts of drugs on intracellular targets. The goal of this study was to develop models to predict free intracellular drug concentrations in the presence of apical efflux transporters. The apical efflux transporter P-glycoprotein (P-gp), encoded by human gene multidrug resistance 1 (MDR1), was studied. Apparent permeabilities for 10 compounds in Madin-Darby canine kidney (MDCK) and MDR1-MDCK cell monolayers were obtained experimentally. Six of these compounds were evaluated additionally in the presence of the P-gp inhibitor cyclosporine A. A three-compartment model was developed, and passive and apical efflux clearances (CL(d) and CL(ae), respectively) were estimated. Endogenous canine transporters also were delineated. The three-compartment model was unable to simulate experimentally observed lag times and exhibited systematic bias across the simulations. Next, a five-compartment model with explicit membrane compartments was developed. This model resulted in lower systematic errors and simulated the lag time observed experimentally. Apical efflux was modeled out of the cell or out of the membrane. The five-compartment model with apical efflux out of the membrane predicted marked differences in unbound intracellular concentrations between the apical-to-basolateral and the basolateral-to-apical directions. Upon apical drug addition, large decreases in intracellular concentrations were observed with the efflux transporter. No such difference was predicted upon basolateral drug addition. This is consistent with experimental differences in the impact of P-gp on hepatic and brain distribution and supports the hypothesis that apical efflux occurs out of the apical membrane.