Nephrotoxicity occurs when kidney-specific detoxification and excretion do not work properly due to the damage or destruction of kidney function by exogenous or endogenous toxicants. Exposure to drugs often results in toxicity in kidney which represents the major control system maintaining homeostasis of body and thus is especially susceptible to xenobiotics. Understanding the toxic mechanisms for nephrotoxicity provides useful information on the development of drugs with therapeutic benefits with reduced side effects. Mechanisms for drug-induced nephrotoxicity include changes in glomerular hemodynamics, tubular cell toxicity, inflammation, crystal nephropathy, rhabdomyolysis, and thrombotic microangiopathy. Biomarkers have been identified for the assessment of nephrotoxicity. The discovery and development of novel biomarkers that can diagnose kidney damage earlier and more accurately are needed for effective prevention of drug-induced nephrotoxicity. Although some of them fail to confer specificity and sensitivity, several promising candidates of biomarkers were recently proved for assessment of nephrotoxicity. In this review, we summarize mechanisms of drug-induced nephrotoxicity and present the list of drugs that cause nephrotoxicity and biomarkers that can be used for early assessment of nephrotoxicity.