Cadmium is a human carcinogen of worldwide concern because it accumulates in the environment due to its extremely long half-life. Its compounds are classified as human carcinogens by several regulatory agencies. Cadmium affects cell proliferation, differentiation, apoptosis and other cellular activities and can cause numerous molecular lesions that would be relevant to carcinogenesis. For a long time cadmium has been considered as a non-genotoxic carcinogen, as it is only weakly mutagenic in bacterial and mammalian cell test systems. Recently, we presented evidence that when assayed in a test system, in which both intragenic and multilocus mutations can be detected, cadmium acts as a strong mutagen which induces predominantly multilocus deletions. In this review, we discuss two mechanisms that play an important role in cadmium mutagenicity: (i) induction of reactive oxygen species (ROS); and (ii) inhibition of DNA repair. Experimental evidence suggests that cadmium at low, for environmental exposure relevant concentrations, induces mutations by inducing oxidative DNA damage and that it decreases genetic stability by inhibiting the repair of endogenous and exogenous DNA lesions, which in turn increase the probability of mutations and consequently cancer initiation by this metal.