A medication error-reporting program is described. Medication errors at a large teaching hospital are reported through traditional incident reports. Specific information on the errors is documented on an additional form; data captured include the type of error, system breakdown point, and class of drug involved. A severity ranking that reflects patient outcome is also assigned to each medication error. The data are entered into a relational database and analyzed. Reports are generated that show the overall error rate, the distribution of errors by severity ranking and drug class, and the error types, system breakdown points, and drug classes associated with errors of the highest severity rankings. Between January and December 1990, the number of medication error reports received per month ranged from 73 to 141, and the number of errors reported per month increased during the year. Although the incident report-based method underestimates the actual number of medication errors, the program has been effective in identifying problem areas and trends so that quality assurance and medical committees can implement measures to improve drug use. The use of a severity-indexed medication error-reporting program based on incident reports and managed through a relational database has revealed problems that are then addressed by other quality assurance measures.