Biotransformation of drugs is one of the major functions of liver. Hepatic drug metabolism develops early in organogenesis and continues in postnatal life through puberty. Genetic and developmental studies on hepatic drug metabolism show that immaturity, polymorphisms, and altered balance of different hepatic enzymatic activities affect pharmacologic inactivation and alter the risk of toxic effects of drugs on the hepatic parenchyma. Although drug-induced liver disease is less common in children, several reports of hepatotoxicity are published every year. Furthermore, the increasing use of nonregulated remedies (eg, herbal preparations or recreational drugs) increases the risk of unpredictable and potentially severe reactions. Many significant advances in the treatment of hepatic diseases have been achieved recently. However, differences in clinical features, natural history, and response to treatment between children and adults require evaluation of new therapeutic options in focused pediatric clinical trials.