The expanding role of oral chemotherapy in oncology is suggested by the abundance of orally formulated agents currently in development. The pharmacoeconomic principles that drive oral drug formulation are discussed. Patient preference for oral therapy is identified as a second major impetus for the design of oral cytotoxics. While the rationale for oral formulations is apparent, substantial patient compliance and pharmacokinetic limitations have been identified for this route of administration. Specific aspects of bioavailability limitations and patient compliance are discussed. Relevant pharmacokinetic data for each orally formulated chemotherapy agent are compared and selected novel oral cytotoxics and cytotoxic modulators are discussed. A review of pharmacokinetic literature suggests substantial variability in bioavailability for many orally formulated cancer cytotoxics. While these findings are observed for all classes of oral drugs, the issue is especially critical for cancer chemotherapy, in which a narrow therapeutic index is frequently observed. Improved bioavailability and reduced interpatient biovariability are therefore desirable for new cytotoxic formulations. Pharmacologic manipulations to improve bioavailability and reduce costs are examined. Oral chemotherapy represents a fundamental change in contemporary oncology practice, driven by pharmacoeconomic issues, patient convenience, and the potential for improved patient quality of life. Novel cytostatic therapies that require protracted drug administration periods will also favor an oral formulation. While the use of oral chemotherapy may initially be limited to metastatic disease palliation, demonstration of equivalent efficacy would allow for its subsequent use in adjuvant settings. This efficacy is contingent on circumventing bioavailability limitations and patient noncompliance. The development of specific, low-toxicity inhibitors of CYP3A4, P-glycoprotein (P-gp), and other drug metabolizing enzymes such as dihydropyrimidine dehydrogenase represents a major innovative step in the successful formulation of oral chemotherapy.