Here, we have presented the development of a systems pharmacokinetics-pharmacodynamics (PK-PD) model for antibody-drug conjugates (ADCs), which uses intracellular target occupancy to drive in-vivo efficacy. The model is built based on PK and efficacy data generated using Trastuzumab-Valine-Citrulline-Monomethyl Auristatin E (T-vc-MMAE) ADC in N87 (high-HER2) and GFP-MCF7 (low-HER2) tumor bearing mice. It was observed that plasma PK of all ADC analytes was similar between the two tumor models; however, total trastuzumab, unconjugated MMAE, and total MMAE exposures were >10-fold, ~1.6-fold, and ~1.8-fold higher in N87 tumors. In addition, a prolonged retention of MMAE was observed within the tumors of both the mouse models, suggesting intracellular binding of MMAE to tubulin. A systems PK model, developed by integrating single-cell PK model with tumor distribution model, was able to capture all in vivo PK data reasonably well. Intracellular occupancy of tubulin predicted by the PK model was used to drive the efficacy of ADC using a novel PK-PD model. It was found that the same set of PD parameters was able to capture MMAE induced killing of GFP-MCF7 and N87 cells in vivo. These observations highlight the benefit of adopting a systems approach for ADC and provide a robust and predictive framework for successful clinical translation of ADCs.