Cytochrome P450s (CYPs) constitute a superfamily of heme-containing enzymes that catalyze the oxidative metabolism of structurally diverse molecules including drugs, with CYP1A2, 2C9, 2C19, 2D6, and 3A4/3A5 participating in the metabolism of ~80% of marketed drugs (more than half by CYP3A family). Modulation of CYP activity by xenobiotics can lead to clinical drug-drug interactions (DDIs) ranging from loss of efficacy to adverse effects. CYP inhibitors are categorized as reversible, quasi-irreversible, or irreversible. Mechanism-based inactivation (MBI) or time-dependent inhibition (TDI) of CYPs—caused by electrophilic reactive metabolites (RMs) generated via CYP metabolism—poses greater safety concerns due to increased PK interaction propensity upon multiple dosing, sustained interactions after discontinuation, and potential autoimmune responses. Regulatory agencies and pharmaceutical companies have recognized the importance of mitigating DDI risks related to CYP TDI, yet questions remain regarding TDI mechanisms, TDI-RM correlation, toxicity likelihood, liability mitigation strategies, and clinical DDI prediction. To address these, this review highlights current knowledge with emphasis on: (a) biochemical/mechanistic approaches to examine TDI/MBI of CYP isozymes with new chemical entities; (b) structure-activity relationship (SAR) studies of marketed drugs associated with CYP inactivation-mediated DDIs; (c) medicinal chemistry tactics to abrogate CYP inactivation liability; (d) progression strategies for CYP MBI-positive drug candidates; (e) utility of in silico methodology (including physiologically based PK simulators) in predicting clinical DDI risks of new candidates.