This is a summary report of the EUFEPS & COST B25 conference on Bioavailability and Bioequivalence which focused on physiological factors and variability. This conference was held at The Royal Olympic Hotel in the centre of Athens (Greece) during the 1-2 of October in 2007. The issues discussed in the conference involved physiological factors affecting drug absorption, the role of pre-systemic effects on bioavailability (BA), the impact of variability in bioequivalence (BE) studies, and a final closing panel session on unresolved issues in BA/BE regulations. Several important aspects of drug absorption were highlighted. It was presented how the complexity of gastrointestinal (GI) physiology and the site dependent absorption can impact on drug BA. Similarly, the effects of food and formulation were also studied. The second session focused on integrating the complexities of GI into modeling the inter-individual variability of absorption and the prediction of first-pass metabolism from in-vitro data. The necessity to measure metabolites, the value of Biopharmaceutical Classification System (BCS), and the more recently proposed Biopharmaceutical Drug Disposition Classification System (BDDCS) were assessed as well. This session closed with presentations of pharmacokinetic software delegates. In the second day of the conference, the problem of high intra-subject variability in BE studies was analyzed. Study design considerations, the use of multiple-dose studies and the role of statistics in BE were also highlighted. Finally, the current thinking of regulatory authorities (EMEA and US-FDA) was presented. The conference closed with a last session on unresolved issues in the regulatory level.