Urethane is an established animal carcinogen and has been classified as “reasonably anticipated to be a human carcinogen.” Until recently, urethane metabolism via esterase was considered the main metabolic pathway of this chemical. However, recent studies in this laboratory showed that CYP2E1, and not esterase, is the primary enzyme responsible for urethane oxidation. Subsequent studies demonstrated significant inhibition of urethane-induced genotoxicity and cell proliferation in Cyp2e1−/− compared to Cyp2e1+/+ mice. Using Cyp2e1−/− mice, current studies were undertaken to assess the relationships between urethane metabolism and carcinogenicity. Urethane was administered via gavage at 1, 10, or 100 mg/kg/day, 5 days/week, for 6 weeks. Animals were kept without chemical administration for 7 months after which they were euthanized, and urethane carcinogenicity was assessed. Microscopic examination showed a significant reduction in the incidences of liver hemangiomas and hemangiosarcomas in Cyp2e1−/− compared to Cyp2e+/+ mice. Lung nodules increased in a dose-dependent manner and were less prevalent in Cyp2e1−/− compared to Cyp2e+/+ mice. Microscopic alterations included bronchoalveolar adenomas, and in one Cyp2e1+/+ mouse treated with 100 mg/kg urethane, a bronchoalveolar carcinoma was diagnosed. Significant reduction in the incidence of adenomas and the number of adenomas/lung were observed in Cyp2e1−/− compared to Cyp2e1+/+ mice. In the Harderian gland, the incidences of hyperplasia and adenomas were significantly lower in Cyp2e1−/− compared to Cyp2e+/+ mice at the 10 mg/kg dose, with no significant differences observed at the high or low doses. In conclusion, this work demonstrated a significant reduction of urethane-induced carcinogenicity in Cyp2e1−/− compared to Cyp2e1+/+ mice and proved that CYP2E1-mediated oxidation plays an essential role in urethane-induced carcinogenicity.