Microscale engineering technologies provide unprecedented opportunities to create cell culture microenvironments that go beyond current three-dimensional in vitro models by recapitulating the critical tissue-tissue interfaces, spatiotemporal chemical gradients, and dynamic mechanical microenvironments of living organs. Here we review recent advances in this field made over the past two years that are focused on the development of 'Organs-on-Chips' in which living cells are cultured within microfluidic devices that have been microengineered to reconstitute tissue arrangements observed in living organs in order to study physiology in an organ-specific context and to develop specialized in vitro disease models. We discuss the potential of organs-on-chips as alternatives to conventional cell culture models and animal testing for pharmaceutical and toxicology applications. We also explore challenges that lie ahead if this field is to fulfil its promise to transform the future of drug development and chemical safety testing.