Cytochromes P450 are responsible for metabolism of most xenobiotics and are required for the efficient elimination of foreign chemicals from the body. Paradoxically, these enzymes also metabolically activate biologically inert compounds to electrophilic derivatives that can cause toxicity, cell death and sometimes cellular transformation resulting in cancer. To establish the role of these enzymes in toxicity and carcinogenicity in vivo, gene knockout mice have been developed. To illustrate the role of P450s in toxicity, CYP2E1-null mice were employed with the commonly used analgesic drug acetaminophen. CYP2E1 is the rate-limiting enzyme that initiates the cascade of events leading to acetaminophen hepatotoxicity; in the absence of this P450, toxicity will only be apparent at high concentrations. Other enzymes and nuclear receptors are also involved in activation or inactivating chemicals. CYP2E1 is induced by alcohol and the primary P450 that carries out ethanol oxidation that can lead to the production of activated oxygen species and oxidative stress that elevate ERK1/2 phosphorylation through EGRF/c-Raf signaling. Paradoxically, activation of this pathway inhibits apoptotic cell death stimulated by reactive oxygen generating chemicals but accelerates necrotic cell death produced by polyunsaturated fatty acids. CYP2E1 is thought to contribute to liver pathologies that result from alcoholic liver disease and non-alcoholic steatohepatitis.