Drug hypersensitivity may manifest ranging from milder skin reactions (e.g., maculopapular exanthema and urticaria) to severe systemic reactions, such as anaphylaxis, drug reactions with eosinophilia and systemic symptoms (DRESS)/drug-induced hypersensitivity syndrome (DIHS), or Stevens-Johnson syndrome (SJS)/toxic epidermal necrolysis (TEN). Current pharmacogenomic studies have made important strides in the prevention of some drug hypersensitivity through the identification of relevant genetic variants, particularly for genes encoding drug-metabolizing enzymes and human leukocyte antigens (HLAs). The associations identified by these studies are usually drug, phenotype, and ethnic specific. The drug presentation models that explain how small drug antigens might interact with HLA and T cell receptor (TCR) molecules in drug hypersensitivity include the hapten theory, the p-i concept, the altered peptide repertoire model, and the altered TCR repertoire model. The broad spectrum of clinical manifestations of drug hypersensitivity involving different drugs, as well as the various pathomechanisms involved, makes the diagnosis and management of it more challenging. This review highlights recent advances in our understanding of the predisposing factors, immune mechanisms, pathogenesis, diagnostic tools, and therapeutic approaches for drug hypersensitivity.