The majority of studies of fetal hepatic elimination have concentrated on the expression and activity of the metabolizing enzymes, but the unique physiologic milieu of the fetal liver should also be considered. The basic structure of the liver is formed by the end of the first trimester. The fetal hepatic circulation differs substantially from that of the adult in that there is an extra input vessel, the umbilical vein, and there is shunting of 30-70% of hepatic blood flow via the ductus venosus. The left and right lobes of the fetal liver seem to function independently with respect to a variety of biochemical parameters, due at least in part to the lower oxygen supply to the right lobe. The zonation of drug-metabolizing enzymes along the hepatic acinus, which is prominent in the adult liver, is absent in the fetal liver. Unlike rodent species, the human fetal liver has a significant capacity for drug metabolism. Of the oxidative enzymes, CYP3A7 accounts for up to 50% of total fetal hepatic cytochrome P450 content. Expression of this enzyme decreases dramatically after birth. CYP1A1 and CYP2D6 have also been detected in human fetal liver, but whether CYP2E1 is expressed remains controversial. Several other cytochrome P450s have been identified and await characterization. Fetal hepatic drug conjugation may prolong fetal exposure to the metabolites produced, which, being more water soluble, do not readily cross the placenta back to the mother and, if excreted in fetal urine, can be recycled in the fetus via amniotic fluid and fetal swallowing. Limited activity of glucuronidation enzymes has been demonstrated in human fetal liver in contrast to the activity of sulfation enzymes, which is significant. Limited in vivo studies in fetal sheep have demonstrated significant fetal hepatic drug elimination, and this has been confirmed in studies of the isolated perfused fetal sheep liver. Our understanding of fetal hepatic elimination processes has advanced steadily over the years. Future developments, however, should consider more fully the influence of the unique physiological milieu of the fetal liver, in addition to the expression and activity of drug metabolizing enzymes.