Studies on drug metabolism have opened new fields in the evaluation of drug efficacy and drug safety in experimental animals and humans, especially in the development of new drugs. The author described the history of discoveries of induction and inhibition of drug-metabolizing enzymes as a key point in the development of drug interaction studies. Studies on the sex-related differences in drug-metabolism have been important fields for understanding the sex-related toxicity and efficacy of drugs and their species differences under normal and pathological conditions. Rats are unique animals among experimental animals and humans. The activities of hepatic drug-metabolizing enzymes, especially cytochrome P450 and sulfotransferase, are regulated through the sex-related secretion pattern of growth hormone. The drug-metabolizing enzymes convert drugs into not only inactive metabolites, but produce toxic intermediates which cause mutagenesis, carcinogenesis and drug-caused allergic reactions. The author carried out extensive studies on the metabolic activation of mutagenic-carcinogenic arylamines and demonstrated important roles of O-acetylation and O-sulfation to cause DNA damages by N-hydroxyarylamines. Pharmacogenetic studies on hamster acetyltransferase were described to understand the individual differences in polymorphic acetylation of arylamines and N-hydroxyarylamines in relation to DNA damages. Finally, the author emphasizes important roles of drug metabolism studies for the development of new drugs by showing a prototype, which has multiple metabolic pathways by multiple enzymes and this shows reduced-extents of individual differences, for increasing efficacy and safety in a future clinical drug therapy.