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Background: Drug-drug interaction (DDI) is a serious public health issue. The L1000 database of the LINCS project has collected millions of genome-wide expressions induced by 20,000 small molecular compounds on 72 cell lines. Whether this unified and comprehensive transcriptome data resource can be used to build a better DDI prediction model is still unclear. Therefore, we developed and validated a novel deep learning model for predicting DDI using 89,970 known DDIs extracted from the DrugBank database (version 5.1.4). Results: The proposed model consists of a graph convolutional autoencoder network (GCAN) for embedding drug-induced transcriptome data from the L1000 database of the LINCS project; and a long short-term memory (LSTM) for DDI prediction. Comparative evaluation of various machine learning methods demonstrated the superior performance of our proposed model for DDI prediction. Many of our predicted DDIs were revealed in the latest DrugBank database (version 5.1.7). In the case study, we predicted drugs interacting with sulfonylureas to cause hypoglycemia and drugs interacting with metformin to cause lactic acidosis, and showed both to induce effects on the proteins involved in the metabolic mechanism in vivo. Conclusions: The proposed deep learning model can accelerate the discovery of new DDIs. It can support future clinical research for safer and more effective drug co-prescription. [ABSTRACT FROM AUTHOR]