Biotransformation has a huge impact on the efficacy and safety of drugs. Ultimately the effects of metabolism can be the lynchpin in the discovery and development cycle of a new drug. This article discusses the impact and application of biotransformation of drugs by mammalian systems, microorganisms, and recombinant enzymes, covering active and reactive metabolites, the impact of the gut microbiome on metabolism, and how insights gained from biotransformation studies can influence drug design from the combined perspectives of a CRO specializing in a range of biotransformation techniques and pharma biotransformation scientists. We include a commentary on how biology-driven approaches can complement medicinal chemistry strategies in drug optimization and the in vitro and surrogate systems available to explore and exploit biotransformation.