Adverse drug reactions (ADRs) are a major cause of hospital admissions, but recent data on the incidence and clinical characteristics of ADRs which occur following hospital admission, are lacking. Patients admitted to twelve wards over a six-month period in 2005 were assessed for ADRs throughout their admission. Suspected ADRs were recorded and analysed for causality, severity and avoidability and whether they increased the length of stay. Multivariable analysis was undertaken to identify the risk factors for ADRs. The 5% significance level was used when assessing factors for inclusion in multivariable models. Out of the 3695 patient episodes assessed for ADRs, 545 (14.7%, 95% CI 13.6–15.9%) experienced one or more ADRs. Half of ADRs were definitely or possibly avoidable. The patients experiencing ADRs were more likely to be older, female, taking a larger number of medicines, and had a longer length of stay than those without ADRs. However, the only significant predictor of ADRs, from the multivariable analysis of a representative sample of patients, was the number of medicines taken by the patient with each additional medication multiplying the hazard of an ADR episode by 1.14 (95% CI 1.09, 1.20). ADRs directly increased length of stay in 147 (26.8%) patients. The drugs most frequently associated with ADRs were diuretics, opioid analgesics, and anticoagulants. In conclusion, approximately one in seven hospital in-patients experience an ADR, which is a significant cause of morbidity, increasing the length of stay of patients by an average of 0.25 days/patient admission episode. The overall burden of ADRs on hospitals is high, and effective intervention strategies are urgently needed to reduce this burden.