In the recent decades, the use of herbal products has been rapidly growing in the Western countries. While their use in many cases causes adverse effects, to date, safety issues of herbal products have not been adequately addressed. It is rarely determined whether the non-purported bioactive constituents in the herbs and the metabolites of the bioactive components can lead to adverse effects. In this review, we discuss, using pyrrolizidine alkaloids (PAs) as an example, the hepatotoxicity and tumorigenicity induced by metabolic activation of herbal components and by herb-herb and herb-drug interactions with other herbal ingredients and synthetic drugs. PAs are constitutively produced by plants as the secondary metabolites. There are more than 600 PAs and PA N-oxides identified in over 6000 plants, and more than half of them exhibit hepatotoxicity. Toxic PA-containing plants grow in many geographical regions worldwide, rendering it highly possible that PA-containing plants are the most common poisonous plants affecting livestock and humans. PAs require metabolic activation mediated by cytochrome P450 enzymes to generate reactive pyrrolic metabolites that react with cellular proteins and DNA leading to hepatotoxicity and genotoxicity. PAs can also modulate both phase I and phase II metabolizing enzymes, which may alter the metabolic fate of endogenous and exogenous chemicals. Alteration and/or competition of the metabolizing enzymes by PAs upon the co-administered herbal medicines or drugs can potentially result in serious clinical and toxicological consequences through decreased pharmacological activities or increased toxic effects.