Herbal remedies are commonly used by patients worldwide. Because these herbal preparations share the same metabolic and transport proteins with prescribed medicines, the potential for a drug-herb interaction is substantial and is an issue of significant concern. This review paper summarizes drug-herb interactions involving inhibition or induction of cytochrome P450 enzymes, drug transporters as well as modulation of drug pharmacodynamics. An increasing number of in vitro and animal studies, case reports and clinical trials evaluating such interactions have been reported, and implications of these studies are discussed in this review. The most commonly implicated drugs in the interaction include anticoagulants, antiplatelets, immunosuppressants, anti-neoplastics, protease inhibitors, and some antidepressants. Pharmacokinetic and/or pharmacodynamic interactions of five commonly used herbal remedies (danshen, garlic, Ginkgo biloba, ginseng, and St John’s wort) with these drugs are presented, with focus of discussion being the potentials for interaction, their mechanisms and clinical implications. There is a necessity for adequate pharmacovigilance to be carried out in minimizing unanticipated but often preventable drug-herb interactions.