The systematic identification and functional analysis of human genes is revolutionizing the study of disease processes and the development and rational use of drugs. It increasingly enables medicine to make reliable assessments of the individual risk to acquire a particular disease, raises the number and specificity of drug targets and explains interindividual variation of the effectiveness and toxicity of drugs. Mutant alleles at a single gene locus for more than 20 drug metabolizing enzymes are some of the best studied individual risk factors for adverse drug reactions and xenobiotic toxicity. Increasingly, genetic polymorphisms of transporter and receptor systems are also recognized as causing interindividual variation in drug response and drug toxicity. However, pharmacogenetic and toxicogenetic factors rarely act alone; they produce a phenotype in concert with other variant genes and with environmental factors. Environmental factors may affect gene expression in many ways. For instance, numerous drugs induce their own and the metabolism of other xenobiotics by interacting with nuclear receptors such as AhR, PPAR, PXR and CAR. Genomics is providing the information and technology to analyze these complex situations to obtain individual genotypic and gene expression information to assess the risk of toxicity.