The polymorphic P450 (CYP) enzyme superfamily is the most important system involved in the biotransformation of many endogenous and exogenous substances including drugs, toxins, and carcinogens. Genotyping for CYP polymorphisms provides important genetic information that help to understand the effects of xenobiotics on human body. For drug metabolism, the most important polymorphisms are those of the genes coding for CYP2C9, CYP2C19, CYP2D6, and CYP3A4/5, which can result in therapeutic failure or severe adverse reactions. Genes coding for CYP1A1, CYP1A2, CYP1B1, and CYP2E1 are among the most responsible for the biotransformation of chemicals, especially for the metabolic activation of pre-carcinogens. There is evidence of association between gene polymorphism and cancer susceptibility. Pathways of carcinogen metabolism are complex, and are mediated by activities of multiple genes, while single genes have a limited impact on cancer risk. Multigenic approach in addition to environmental determinants in large sample studies is crucial for a reliable evaluation of any moderate gene effect. This article brings a review of current knowledge on the relations between the polymorphisms of some CYPs and drug activity/toxicity and cancer risk.