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Human embryonic and induced pluripotent stem cell-derived hepatocytes (hESC-Hep and hiPSC-Hep) have the potential to provide relevant human in vitro model systems for toxicity testing and drug discovery studies. In this study, the expression and function of important drug metabolizing cytochrome P450 (CYP) enzymes and transporter proteins in hESC-Hep and hiPSC-Hep were compared to cryopreserved human primary hepatocytes (hphep) and HepG2 cells. Overall, CYP activities in hESC-Hep and hiPSC-Hep were much lower than in hphep cultured for 4 h, but CYP1A and 3A activities were comparable to levels in hphep cultured for 48 h (CYP1A: 35% and 26% of 48 h hphep, respectively; CYP3A: 80% and 440% of 48 h hphep, respectively). Importantly, in hESC-Hep and hiPSC-Hep, CYP activities were stable or increasing for at least one week in culture which was in contrast to the rapid loss of CYP activities in cultured hphep between 4 and 48 h after plating. With regard to transporters, in hESC-Hep and hiPSC-Hep, pronounced NTCP activity (17% and 29% of 4 h hphep, respectively) and moderate BSEP activity (6% and 8% of 4 h hphep, respectively) were observed. Analyses of mRNA expression and immunocytochemistry supported the observed CYP and transporter activities and showed expression of additional CYPs and transporters. In conclusion, the stable expression and function of CYPs and transporters in hESC-Hep and hiPSC-Hep for at least one week opens up the possibility to reproducibly perform long term and extensive studies, e.g. chronic toxicity testing, in a stem cell-derived hepatic system.