Although rare, flutamide has been associated with severe hepatotoxicity and death. By 1996, 46 cases of severe cholestatic hepatitis had been reported, with 20 fatalities. There have been continued case reports since, including liver transplants and death. A 2021 review of the literature found 15 cases of serious hepatotoxicity in women treated with flutamide, including 7 liver transplantations and 2 deaths.
Based on the number of prescriptions written and the number of cases reported in the MedWatch database, the rate of serious hepatotoxicity associated with flutamide treatment was estimated in 1996 as approximately 0.03% (3 per 10,000). However, other research has suggested that the true incidence of significant hepatotoxicity with flutamide may be much greater, as high as 0.18 to 10%.
 Flutamide is also associated with liver enzyme elevations in up to 42 to 62% of patients, although marked elevations in liver enzymes (above 5 times upper normal limit) occur only in 3 to 5%. The risk of hepatotoxicity with flutamide is much higher than with nilutamide or bicalutamide. Lower doses of the medication appear to have a possibly reduced but still significant risk. Liver function should be monitored regularly with liver function tests during flutamide treatment. In addition, due to the high risk of serious hepatotoxicity, flutamide should not be used in the absence of a serious indication.
The mechanism of action of flutamide-induced hepatotoxicity is thought to be due to mitochondrial toxicity. Specifically, flutamide and particularly its major metabolite hydroxyflutamide inhibit enzymes in the mitochondrial electron transport chain in hepatocytes, including respiratory complexes I (NADH ubiquinone oxidoreductase), II (succinate dehydrogenase), and V (ATP synthase), and thereby reduce cellular respiration via ATP depletion and hence decrease cell survival. Inhibition of taurocholate (a bile acid) efflux has also been implicated in flutamide-induced hepatotoxicity. In contrast to flutamide and hydroxyflutamide, which severely compromise hepatocyte cellular respiration in vitro, bicalutamide does not significantly do so at the same concentrations and is regarded as non-mitotoxic. It is thought that the nitroaromatic group of flutamide and hydroxyflutamide enhance their mitochondrial toxicity; bicalutamide, in contrast, possesses a cyano group in place of the nitro moiety, greatly reducing the potential for such toxicity.
The hepatotoxicity of flutamide appears to depend on hydrolysis of flutamide catalyzed by an arylacetamide deacetalyse enzyme. This is analogous to the hepatotoxicity that occurs with the withdrawn paracetamol (acetominophen)-related medication phenacetin. In accordance, the combination of paracetamol (acetaminophen) and flutamide appears to result in additive to synergistic hepatotoxicity, indicating a potential drug interaction.
Hepatotoxicity with flutamide may be cross-reactive with that of cyproterone acetate.