The multidrug resistance (MDR1) gene product P-glycoprotein is a membrane protein that functions as an ATP-dependent efflux pump, transporting exogenous and endogenous substrates from the inside of cells to the outside. Physiological expression of P-glycoprotein in tissues with excretory or protective function is a major determinant of drug disposition and provides a cellular defense mechanism against potentially harmful compounds. Therefore, P-glycoprotein has significant impact on therapeutic efficacy and toxicity as it plays a key role in absorption of oral medications from the intestinal tract, excretion into bile and urine, and distribution into protected tissues such as the brain and testes. There is increasing interest in the possible role of genetic variation in MDR1 in drug therapy. Numerous genetic polymorphisms in MDR1 have been described, some of which have been shown to determine P-glycoprotein expression levels and substrate transport. Furthermore, some of these polymorphisms have an impact on pharmacokinetic and pharmacodynamic profiles of drug substrates and directly influence outcome and prognosis of certain diseases. This review will focus on the impact of genetic variation in MDR1 on expression and function of P-glycoprotein and the implications of this variation for drug therapy and disease risk.