Drug metabolism is the chemical alteration of a drug via a biological system to aid its elimination by increasing its hydrophilicity. Drug metabolism occurs in two phases: Phase 1 includes oxidative reactions such as those undertaken by the cytochrome P450s, but also includes reduction and hydrolysis. Phase II reactions involve conjugations with endogenous molecules such as glucuronic acid, sulphate, amino acids and glutathione. Most drug metabolism occurs in the liver but can take place in other tissues including the gastrointestinal tract, kidney and lung. Drug metabolism is studied in vitro using enzyme systems prepared from liver and in vivo throughout the drug discovery and development process. LC-MS/MS, and where appropriate radiolabeled drugs are used in these studies. For example, it is important to avoid extensive first pass metabolism for early drug selection but also to ensure all human metabolites are qualified in toxicology studies according to the MIST guidelines for product registration. Some metabolites may be active, with the same or different pharmacology, and/or toxic, and in some cases reactive metabolites cause idiosyncratic toxicity. Thus metabolite identification and the relationship to efficacy and toxicity need to be understood as quickly as possible. Since drug metabolism is mediated by enzymes, there is potential for natural variability and for co-administered drugs to interact, either by enzyme inhibition or induction. Methods to investigate this and transporter interactions are, therefore, discussed with respect to drug discovery decisions and Regulatory Guidelines. The chapter provides an overview of all these aspects of drug metabolism and its relevance and value in support of drug R and D.