The interaction of capsaicin with microsomal drug-metabolizing systems was assessed to determine the role that bioactivation of capsaicin may play in the induction of hepatotoxicity and neurotoxicity. Capsaicin produced a type I spectral change in rat hepatic microsomes in a high affinity (Ks = 8 microM) concentration-dependent manner and was approximately equipotent with SKF-525A in inhibiting ethylmorphine demethylation. Capsaicin (10 mg/kg, s.c.) inhibited biotransformation in vivo as measured by prolongation of pentobarbital sleep time. Reactive metabolites of capsaicin were studied using [3H]dihydrocapsaicin. [3H]Dihydrocapsaicin bound irreversibly to hepatic microsomal protein after in vitro incubation or in vivo administration. No binding was observed in spinal cord or brain. Although the bioactivation and subsequent covalent binding of capsaicin equivalents may initiate events associated with the hepatotoxicity of capsaicin, it appears that capsaicin-induced neuropathy does not involve covalent interactions with neuroproteins in spinal cord or brain.