Raloxifene was approved in 2007 by the FDA for the chemoprevention of breast cancer in postmenopausal women at high risk for invasive breast cancer. Approval was based in part on the improved safety profile for raloxifene relative to the standard treatment of tamoxifen. However, recent studies have demonstrated the ability of raloxifene to form reactive intermediates and act as a mechanism-based inhibitor of cytochrome P450 3A4 (CYP3A4) by forming adducts with the apoprotein. However, previous studies could not differentiate between dehydrogenation to a diquinone methide and the more common oxygenation pathway to an arene oxide as the most likely intermediate to inactivate CYP3A4. In the current work, (18)O-incorporation studies were utilized to carefully elucidate CYP3A4-mediated oxygenation versus dehydrogenation of raloxifene. These studies established that 3'-hydroxyraloxifene is produced exclusively via CYP3A4-mediated oxygenation and provide convincing evidence for the mechanism of CYP3A4-mediated dehydrogenation of raloxifene to a reactive diquinone methide, while excluding the alternative arene oxide pathway. Furthermore, it was demonstrated that 7-hydroxyraloxifene, which was previously believed to be a typical O(2)-derived metabolite of CYP3A4, is in fact produced by a highly unusual hydrolysis pathway from a putative ester, formed by the conjugation of raloxifene diquinone methide with a carboxylic acid moiety of CYP3A4, or other proteins in the reconstituted system. These findings not only confirm CYP3A4-mediated dehydrogenation of raloxifene to a reactive diquinone methide but also suggest a novel route of raloxifene toxicity.