One of the most important determinants of drug action is drug biotransformation. The available data from humans suggest that drug-biotransforming P450 isozymes studied to date exist at variably low to negligible levels during fetal life, progressively increase until just prior to parturition. This chapter provides an updated review of drug biotransformation as it applies to the perinatal period. Cresteil et al. postulated that P450s present in late fetal and early neonatal rats were replaced in older animals by immunologically different isozymes, some of them resulting from neonatal imprinting. Larger and relatively nonplanar substrates are preferred as aglycone acceptors and a "neonatal" developmental pattern is observed in which activities are normally first detectable subsequent to parturition. Human fetal livers at gestational ages ranging between 17 and 27 weeks were assayed both immunologically and enzymically with benzo(a)pyrene 4,5-oxide as substrate, and an excellent correlation between the two parameters was found.