According to recent epidemiological reports, almost 40% of American population use complimentary and alternative medicine (CAM) during their lifetime. Patients detected with HIV or cancer often consume herbal products especially St. John's wort (SJW) for antidepressants in combination with prescription medicines. Such self-administered herbal products along with prescribed medicines raise concerns of therapeutic activity due to possible drug-herbal interactions. P-glycoprotein (P-gp) and cytochrome P450 3A4 (CYP3A4) together constitute a highly efficient barrier for many orally absorbed drugs. Available literature, clinical reports and in vitro studies from our laboratory indicate that many drugs and herbal active constituents are substrates for both P-gp and CYP3A4. Results from clinical studies and case reports indicate that self-administered SJW reduce steady state plasma concentrations of amitriptyline, cyclosporine, digoxin, fexofenadine, amprenavir, indonavir, lopinavir, ritonavir, saquinavir, benzodiazepines, theophyline, irinotecan, midazolan and warfarin. This herbal agent has been also reported to cause bleeding and unwanted pregnancies when concomitantly administered with oral contraceptives. Most of these medicinal agents and SJW are substrates for P-gp and/or CYP3A4. In vitro studies from our laboratory suggest that short-term exposure with pure herbal agents such as hypericin, kaempferol and quercetin or extract of SJW resulted in higher uptake or influx of ritonavir and erythromycin. Hypericin, kaempferol and quercetin also caused a remarkable inhibition of cortisol metabolism with the percent intact cortisol values of 64.58%, 89.6% and 90.1%, respectively, during short-term in vitro experiments. Conversely, long-term exposure of herbal agents (hyperforin, kaempferol and quercetin) showed enhanced expression of CYP3A4 mRNA in Caco-2 cells. In another study, we observed that long-term exposure of hypericin, kaempferol, quercetin and silibinin resulted in higher MDR-1 mRNA expression in Caco-2 cells. Therefore, herbs can pharmacokinetically act as inhibitors or inducers. Medicinal agents that are substrates P-gp-mediated efflux and/or CYP-mediated metabolism are likely to be potential candidates for drug-herbal interactions. The duration of exposure of cells/healthy volunteers/animals to herbals appears to be critical for drug-herbal interaction. An increase in plasma drug concentration is possible during concomitant administration of SJW and prescribed drugs. In contrast, prolonged intake of herbal supplement followed by drug administration may result in subtherapeutic concentrations. Therefore, clinical implications of such drug herbal interactions depend on a variety of factors such as dose, frequency and timing of herbal intake, dosing regimen, route of drug administration and therapeutic range. In vitro screening techniques will play a major role in identifying possible herb-drug interactions and thus create a platform for clinical studies to emerge. Mechanisms of drug-herbal interaction have been discussed in this review article.