Acetaminophen (APAP) hepatotoxicity is currently the single most important cause of acute liver failure in the US, and is associated with a significant number of deaths. The toxic response to APAP is triggered by a highly reactive metabolite N-acetyl-p-benzoquinone-imine. Following the hepatocellular initiation events, such as glutathione depletion and covalent binding, intracellular stress simultaneously activates signal transduction and transcription factor pathways that are protective or toxic (directly or through sensitisation). Subsequently, pro- and anti-inflammatory cascades of the innate immune system are simultaneously activated, the balance of which plays a major role in determining the progression and severity of APAP-induced hepatotoxicity. The threshold and susceptibility to APAP hepatotoxicity is determined by the interplay of injury promoting and inhibiting events downstream of the initial production of toxic metabolite. The environmental and genetic control of these intracellular and intercellular responses to toxic metabolites may be of critical importance in determining susceptibility to APAP hepatotoxicity and presumably idiosyncratic drug hepatotoxicity.