APAP causes one of the body's primary antioxidants, glutathione, to be
depleted, allowing for oxidative cellular injury, particularly in the
presence of ethanol, and thus is not particularly safe in dosages over
2 grams per day (and some pharmacologists, such as myself, believe that
amount to be much lower with chronic dosing. In 1986, a cousin to APAP
or Tylenol called phenacetin was taken off the market for similar
reasons. But the acetaminophen lobby is very strong in the US)

APAP's exact mechanism is unknown, but it appears to work via
acetylation of hydroxyl residues in certain enzymes that involve the
thalamic pain perception process. APAP is the only major OTC analgesic
that has no anti-inflammatory effects because, unlike aspirin, it does
not acetylate the serine residues of the COX enzymes which affect the
arachidonic acid cascade.

MobiusDick