Phase 1 of metabolism is concerned with functionalization, that is the introduction or exposure of functional groups on the chemical structure of a compound. This provides a 'handle' for phase 2 conjugating species with which to react with. Many xenobiotics are lipophilic and almost chemically inert (e.g. PAHs) so would not necessarily undergo a phase 2 reaction. Making them more chemically reactive would facilitate their excretion but also increases their chance of reacting with cellular macromolecules (e.g. proteins, DNA). There is a fine balance between producing a more reactive metabolite and conjugation reactions.
There are two groups of enzymes in phase 1 - oxidoreductases and hydrolases. Oxidoreductases introduce an oxygen atom into or remove electrons from their substrates. The major oxidoreductase enzyme system is called the P450 monooxygenases. Other systems include flavin-containing monooxygenases (FMO), cyclooxygenases (COX) and monoamine oxidases (MAO). Hydrolases hydrolyse esters, amides, epoxides and glucuronides.