Drug functionalization through formation of hydrophilic groups is the norm in phase I metabolism of drugs for modification of drug action. The reactions involved are mainly oxidative catalyzed mostly by CYP isoenzymes. The benzene ring, as phenyl or fused with other rings, is the most common hydrophobic pharmacophoric moiety in drug molecules. On the other hand the alkoxy group (mainly methoxy) bonded to the benzene ring assumes an important and sometimes essential pharmacophoric status in some drug classes. Upon metabolic oxidation, both moieties, i.e. the benzene ring and the alkoxy group, produce hydroxy groups; the products are arenolic in nature. Through a pharmacokinetic effect, the hydroxy group enhances the water solubility and elimination of the metabolite with the consequent termination of drug action. However, through hydrogen bonding, the hydroxy group may modify the pharmacodynamics of the interaction of the metabolite with the site of parent drug action (i.e. the receptor). Accordingly, the expected pharmacologic outcome will be enhancement, retaining, attenuation, or loss of activity of the metabolite relative to the parent drug. All the above issues have been presented and discussed in this review using selected members of different classes of drugs with inferences regarding mechanisms, drug design and drug development.