Gefitinib is an inhibitor of the epidermal growth factor receptor (EGFR) tyrosine kinase and has been approved for the treatment of nonsmall cell lung cancer refractory to established cancer treatments. Several cases of adverse hepatic and pulmonary events have been reported, which led to discontinuation of therapy. While the mechanism of toxicity remains unknown, we present evidence that gefitinib accumulates in the liver and lung, and it can be bioactivated in hepatic, intestinal, and pulmonary microsomes to form a reactive metabolite. The reactive metabolite was trapped by the peptide mimetic GSH, indicating that the metabolite was sufficiently reactive to bind to the cysteine groups of proteins. Two cytochrome P450-dependent gefitinib-GSH adducts were detected, and P450 1A1 and 3A4 were found to be the major enzymes responsible for adduct formation. The mechanism of bioactivation is proposed to involve oxidative defluorination of gefitinib to form a reactive quinone-imine. Clinical reports have noted an increase in adverse pulmonary events with patients who continued smoking. Consistent with the clinical toxicology data, a 12-fold increase in GSH adduct formation was detected in human pulmonary microsomes from smokers over nonsmokers, in agreement with P450 1A1 being induced by cigarette smoke.