Drug-inducible systems allowing the control of transgene expression and knockdown in mammalian cells are invaluable tools for genetic research, and could also play important roles in translational research or gene therapy. We and others have developed a lentivector-based, conditional gene expression system for drug-controllable expression of transgenes and small hairpin RNAs (shRNAs). This system is highly robust and versatile, governing tightly controlled expression of transgenes and endogenous cellular genes (through shRNAs) in various primary and established cell lines in vitro, as well as in vivo in the central nervous system or in human cancer cells xenotransplanted into nude mice. The goal of this article is to provide a concise methodology for construction and manipulation of this conditional lentiviral-based system, and quantitative analyses of drug-inducible transgene expression and gene knockdown both in vitro and in vivo.