Acetaminophen (N-acetyl-p-aminophenol, APAP) is a commonly used analgesic/antipyretic. When oxidized by P450, a toxic APAP metabolite is generated. Human P450 3A4 was expressed in Escherichia coli , purified, and reconstituted using artificial liposomes. Oxidation of APAP by P450 3A4, as detected by the formation of its glutathione adduct, was found to exhibit negative homotropic cooperativity with a Hill coefficient of 0.7. In the presence of caffeine, the observed kinetics were close to classical Michaelis-Menten kinetics with a Hill coefficient approaching 1. In order to probe for a potential repositioning of APAP within the P450 3A4 pocket in the presence of caffeine, NMR T1 paramagnetic relaxation techniques were used to calculate distances from the P450 3A4 heme iron to protons of APAP alone and in the presence of caffeine. Both APAP and caffeine were found to bind at the active site in proximity to the heme iron. When APAP was incubated with P450 3A4, the acetamido group of APAP was found to be closest to the heme iron consistent with the amide group of APAP weakly associating with the heme iron. The addition of caffeine disrupted the ability of APAP to coordinate with the heme iron of P450 3A4 and enhanced the rate of oxidation to its toxic metabolite.