The liver represents the major site of drug metabolism in humans. The developmental changes that occur in the liver's metabolic activity during fetal life and in the perinatal period are at the basis of the varied sensitivity of human newborns to many drugs. The decreased capacity of the fetal and newborn liver to metabolize, detoxify, and excrete drugs - total cytochrome P450 content in the fetal liver being 30% to 60% of adult values - may explain the prolonged actions of many drugs in the newborn, as well as less their potential toxicity. On the other hand, the low levels of phase I (activation) enzymes, producing more polar reactive and often toxic metabolites, could explain the lower incidence of adverse effects of some drugs reported in newborns. Moreover, the greater capacity of newborns to synthesize glutathione is at the basis of their ability in inactivating many toxic metabolites. Here we review the acute and chronic liver toxicity due to the most widely used drugs in the neonate. We will discuss in detail the biochemical profile of the fetal and neonatal liver, and the toxic metabolites formed during the metabolism of the most widely used drugs in the neonate. The histological picture of liver disease related to the therapeutic use of drugs will be discussed, with particular emphasis on the mode of cell death involved in hepatitis induced by different drugs most frequently utilized in the neonatal intensive care units.