A number of drugs have been withdrawn from the market or severely restricted in their use because of unexpected toxicities that become apparent only after the launch of new drug entities. Circumstantial evidence suggests that, in most cases, reactive metabolites are responsible for these unexpected toxicities. In this review, a general overview of the types of reactive metabolites and the consequences of their formation are presented. The current approaches to evaluate bioactivation potential of new compounds with particular emphasis on the advantages and limitation of these procedures will be discussed. Reasonable reasons for the excellent safety record of certain drugs susceptible to bioactivation will also be explored and should provide valuable guidance in the use of reactive-metabolite assessments when nominating drug candidates for development. This will, in turn, help us to design and bring safer drugs to the market.