Although the major working hypothesis for the mechanism of idiosyncratic drug reactions (IDRs), the hapten hypothesis, has not changed since 1987, several hypotheses have been added, for example, the danger hypothesis and the pharmaceutical interaction hypothesis. Genetic studies have found that several IDRs are linked to specific HLA genes, providing additional evidence that they are immune-mediated. Evidence that most IDRs are caused by reactive metabolites has led pharmaceutical companies to avoid drug candidates that form significant amounts of reactive metabolites; however, at least one IDR, ximelagatran-induced liver toxicity, does not appear to be caused by a reactive metabolite. It is possible that there are biomarkers such as those related to cell stress that would predict that a drug candidate would cause a significant incidence of IDRs; however, there has been no systematic study of the changes in gene expression induced by drugs known to cause IDRs. A major impediment to the study of the mechanisms of IDRs is the paucity of valid animal models, and if we had a better mechanistic understanding, it should be easier to develop such models. There is growing evidence that these adverse reactions are more varied and complex than previously recognized, and it is unlikely that a quick fix will be achieved. However, IDRs are an important cause of patient morbidity and mortality and markedly increase the uncertainty of drug development; therefore, continued basic research in this area is essential.