Aflatoxins are associated with acute toxicoses in poultry and livestock and with liver cancer in human populations in Africa and Southeast Asia. Comparative metabolism studies indicate that aflatoxin B1, the most potent of these compounds, requires metabolic activation to the ultimate carcinogen. The mycotoxin (1) is oxidatively demethylated to form the phenolic derivative, (2) is hydroxylated directly at three sites, and (3) undergoes reduction of the carbonyl group in the cyclopentenone ring to a hydroxyl group; these five hydroxy derivatives all appear to be part of detoxication pathways. Considerable evidence is now available to support the hypothesis that activation of aflatoxin B1 to the ultimate carcinogen involves epoxidation of the double bond in the terminal furan ring. The epoxide decomposes to form a carbonium ion at C-2, which attacks nucleophilic sites in DNA, especially on the guanine moiety. Thus, like carcinogenic polycyclic hydrocarbons and N-nitroso compounds, aflatoxin B1 appears to be activated to an alkylating agent.