The usefulness of Caco-2 cell monolayers in determining the intestinal drug absorption of potential drug candidates as such and from delivery systems, elucidating the underlying mechanisms thereof, presystemic metabolism, cellular uptake and cytotoxicological assessment has been exemplified in this review. The role of Caco-2 cell monolayers in studying the effectiveness, involved mechanism and toxicity of various excipients for drug absorption promotion has also been discussed.