The gastrointestinal (GI) tract is the largest absorption organ in the body and is also enriched with many of the Xenobiotic Processing Genes (XPGs), which play an important role in xenobiotic bioactivation, metabolism, and detoxification. The application of genetically modified mouse models to study drug metabolism and toxicity has proven beneficial over the past decade, and with the ability to culture primary cells from these animal experiments can now be developed in vitro to examine mechanistic properties. Intestinal stem cells (ISCs), located in the crypt zone at the bottom of the villi, produce and differentiate into intestinal epithelial cells (IECs) as a supply for continuous intestinal renewal. Methods have been established in long‐term culture conditions in which one single Lgr5+ stem cell embedded in matrix gel can independently generate villus‐like epithelial domains with the presence of all differentiated IECs. Here, we report the application of 3D crypt organoid cultures as a tool for the study of intestinal drug metabolism and toxicity evaluation. Crypt cells were isolated from mouse intestinal tissue, suspended into matrigels, and cultured in the advanced DMEM/F12 medium supplemented with growth factors. Following continuous budding, crypts were further expanded to create organoids and the function of genes and enzymes involved in drug metabolism were evaluated. Crypt cultures were treated with vehicle (control) or different prototypical agonists of the xenobiotic nuclear receptors (XNR), including the AhR agonist TCDD, PXR agonist PCN, CAR agonist TCPOBOP, PPARa agonist Wy14643, and LXRa agonist T0901317. RT‐QPCR results demonstrated that in response to the different XNR agonists, the representative downstream target genes, including Cyp1a1 (by TCDD), Cyp3a11 (by PCN), Cyp2b10 (by TCPOBOP), Cyp4a10 (by Wy14643), and Abca1 (by T0901317) were largely induced. To further validate receptor‐specific gene induction by their corresponding ligands, we validated these findings using XNR‐null mice. In crypts isolated from Pxr−/−, PCN failed to induce Cyp3a11 gene expression; similarly, TCPOBOP and Wy14643 failed to induce Cyp2b10 or Cyp4a10 in the crypt organoids isolated from Car−/− and Ppara−/− mice, respectively. Camptothecin (CPT)‐11 (Irinotecan), an anticancer drug that generates substantial intestinal toxicity, is bioactivated by carboxylesterases to form the active topoisomerase 1 inhibitor SN‐38. Previous studies in our laboratory have shown that the deletion of intestinal UGT1A1 greatly sensitizes mice toward irinotecan induced intestinal toxicity induced by SN‐38. Bioactivation of irinotecan and cytotoxicity of SN‐38 can also be evaluated in novel crypt organoid cultures. This study suggests that crypt organoid cultures can be exploited as an effective in vitro model for studying the impact of xenobiotics on intestinal XPGs, drug metabolism, and toxicity.Support or Funding InformationSupported by ES010337 and ES024818.