Skin is a major target organ for allergic reactions to small molecular weight compounds. Drug allergic reactions may be life-threatening such as in the case of anaphylactic reactions or bullous drug reactions and occur in about 5% of all hospitalized patients. Allergic contact dermatitis has an enormous influence on the social life of the patient because it is the most frequent reason for occupational skin diseases and the treatment and prevention of this disease cost approximately euro 3 billion per year in Germany. The different proposed pathophysiological pathways leading to a drug eruption are discussed in this paper. All major enzymes which are involved in the metabolism of xenobiotica were shown to be present in skin. Evidence supporting the role of metabolism in the development of drug allergy and allergic contact dermatitis is demonstrated in the example of sulphonamides and fragrances.