Personalized medicine strives to optimize drug treatment for the individual patient by taking into account both genetic and non-genetic factors for drug response. Inflammation is one of the non-genetic factors that has been shown to greatly affect the metabolism of drugs—primarily through inhibition of cytochrome P450 (CYP450) drug-metabolizing enzymes—and hence contribute to the mismatch between the genotype predicted drug response and the actual phenotype, a phenomenon called phenoconversion. This review focuses on inflammation-induced drug metabolism alterations. In particular, we discuss the evidence assembled through human in-vitro models on the effect of inflammatory mediators on clinically relevant CYP450 isoform levels and their metabolizing capacity. We also present an overview of the current understanding of the mechanistic pathways via which inflammation in hepatocytes may modulate hepatic functions that are critical for drug metabolism. Furthermore, since large inter-individual variability in response to inflammation is observed in human in-vitro models and clinical studies, we evaluate the potential role of pharmacogenetic variability in the inflammatory signaling cascade and how this can modulate the outcome of inflammation on drug metabolism and response.