Traditional Chinese medicine (TCM) has long been used for treating illness in China and other Asian countries, and recently used by the Western countries in several different ways, either for new drug development, or as functional foods and dietary supplements. However, quality assurance and health adverse effects of the herbal plants have not been well studied. Pyrrolizidine alkaloids, a class of hepatotoxic and tumorigenic compounds, have been detected in herbal plants and dietary supplements. In this review, the sources of the pyrrolizidine alkaloid-containing Chinese herbal plants in China and the toxicity, genotoxicity, and tumorigenicity of these compounds are discussed. The metabolic pathways, particularly the activation pathways leading to genotoxicity, are discussed. Recent mechanistic studies indicate that pyrrolizidine alkaloids induce tumors via a genotoxic mechanism mediated by 6,7-dihydro-7-hydroxy-1-hydroxymethyl- 5H-pyrrolizine (DHP)-derived DNA adduct formation. This mechanism may be general to most carcinogenic pyrrolizidine alkaloids. Perspectives are included for suggestion of directions of future research