Recent research of the metabolism and biological effects of arsenic has profoundly changed our understanding of the role of metabolism in modulation of toxicity and carcinogenicity of this metalloid. Historically, the enzymatic conversion of inorganic arsenic to mono- and dimethylated species has been considered a major mechanism for detoxification of inorganic arsenic. However, compelling experimental evidence obtained from several laboratories suggests that biomethylation, particularly the production of methylated metabolites that contain trivalent arsenic, is a process that activates arsenic as a toxin and a carcinogen. This article summarizes this evidence and provides new data on a) the toxicity of methylated trivalent arsenicals in mammalian cells, b) the effects of methylated trivalent arsenicals on gene transcription, and c) the mechanisms involved in arsenic methylation in animal and human tissues.