Nevirapine (NVP) is an anti-HIV drug associated with severe hepatotoxicity and skin rashes, which raises concerns about its chronic administration. There is increasing evidence that metabolic activation to reactive electrophiles capable of reacting with bionucleophiles is likely to be involved in the initiation of these toxic responses. Phase I NVP metabolism involves oxidation of the 4-methyl substituent and the formation of phenolic derivatives that are conceivably capable of undergoing further metabolic oxidation to electrophilic quinoid species prone to react with bionucleophiles. The covalent adducts thus formed might be at the genesis of toxic responses. As part of a program aimed at evaluating the possible contribution of quinoid derivatives of Phase I phenolic NVP metabolites to the toxic responses elicited by the parent drug, we have investigated the oxidation of 2-hydroxy-NVP with dipotassium nitroso-disulfonate (Frémy's salt), mimicking the one-electron oxidation involved in enzyme-mediated metabolic oxidations. We report herein the isolation and full structural characterization of a 1H-pyrrole-2,5-dione derivative as a major product, stemming from an unusual pyridine ring contraction.