We investigate the suitability of toroidal microcavities for strong-coupling cavity quantum electrodynamics (QED). Numerical modeling of the optical modes demonstrate a significant reduction of the modal volume with respect to the whispering gallery modes of dielectric spheres, while retaining the high-quality factors representative of spherical cavities. The extra degree of freedom of toroid microcavities can be used to achieve improved cavity QED characteristics. Numerical results for atom-cavity coupling strength g, critical atom number No, and critical photon number no for cesium are calculated and shown to exceed values currently possible using Fabry-Perot cavities. Modeling predicts coupling rates g/2π exceeding 700 MHz and critical atom numbers approaching 10^(-7) in optimized structures. Furthermore, preliminary experimental measurements of toroidal cavities at a wavelength of 852 nm indicate that quality factors in excess of 108 can be obtained in a 50-µm principal diameter cavity, which would result in strong-coupling values of (g/(2π),n(0),N-0) = (86 MHz, 4.6 x 10^(-4), 1.0 x 10^(-3)).