The efficacy of drugs widely varies in individuals, and the gut microbiota plays an important role in this variability. The commensal microbiota living in the human gut encodes several enzymes that chemically modify systemic and orally administered drugs, and such modifications can lead to activation, inactivation, toxification, altered stability, poor bioavailability, and rapid excretion. Our knowledge of the role of the human gut microbiome in therapeutic outcomes continues to evolve. Recent studies suggest the existence of complex interactions between microbial functions and therapeutic drugs across the human body. Therapeutic drugs or xenobiotics can influence the composition of the gut microbiome and the microbial encoded functions. Both these deviations can alter the chemical transformations of the drugs and hence treatment outcomes. In this review, we provide an overview of (i) the genetic ecology of microbially encoded functions linked with xenobiotic degradation; (ii) the effect of drugs on the composition and function of the gut microbiome; and (iii) the importance of the gut microbiota in drug metabolism.