Despite the lack of sufficient information on the safety of herbal products, their use as alternative and/or complementary medicine is globally popular. There is also an increasing interest in medicinal herbs as precursor for pharmacological actives. Of serious concern is the concurrent consumption of herbal products and conventional drugs. Herb-drug interaction (HDI) is the single most important clinical consequence of this practice. Using a structured assessment procedure, the evidence of HDI presents with varying degree of clinical significance. While the potential for HDI for a number of herbal products is inferred from non-human studies, certain HDIs are well established through human studies and documented case reports. Various mechanisms of pharmacokinetic HDI have been identified and include the alteration in the gastrointestinal functions with consequent effects on drug absorption; induction and inhibition of metabolic enzymes and transport proteins; and alteration of renal excretion of drugs and their metabolites. Due to the intrinsic pharmacologic properties of phytochemicals, pharmacodynamic HDIs are also known to occur. The effects could be synergistic, additive, and/or antagonistic. Poor reporting on the part of patients and the inability to promptly identify HDI by health providers are identified as major factors limiting the extensive compilation of clinically relevant HDIs. A general overview and the significance of pharmacokinetic and pharmacodynamic HDI are provided, detailing basic mechanism, and nature of evidence available. An increased level of awareness of HDI is necessary among health professionals and drug discovery scientists. With the increasing number of plant-sourced pharmacological actives, the potential for HDI should always be assessed in the non-clinical safety assessment phase of drug development process. More clinically relevant research is also required in this area as current information on HDI is insufficient for clinical applications.