Adverse drug events, especially those that may be preventable, are among the most serious concerns about medication use in older persons cared for in the ambulatory clinical setting. To assess the incidence and preventability of adverse drug events among older persons in the ambulatory clinical setting. Cohort study of all Medicare enrollees (30 397 person-years of observation) cared for by a multispecialty group practice during a 12-month study period (July 1, 1999, through June 30, 2000), in which possible drug-related incidents occurring in the ambulatory clinical setting were detected using multiple methods, including reports from health care providers; review of hospital discharge summaries; review of emergency department notes; computer-generated signals; automated free-text review of electronic clinic notes; and review of administrative incident reports concerning medication errors. Number of adverse drug events, severity of the events (classified as significant, serious, life-threatening, or fatal), and whether the events were preventable. There were 1523 identified adverse drug events, of which 27.6% (421) were considered preventable. The overall rate of adverse drug events was 50.1 per 1000 person-years, with a rate of 13.8 preventable adverse drug events per 1000 person-years. Of the adverse drug events, 578 (38.0%) were categorized as serious, life-threatening, or fatal; 244 (42.2%) of these more severe events were deemed preventable compared with 177 (18.7%) of the 945 significant adverse drug events. Errors associated with preventable adverse drug events occurred most often at the stages of prescribing (n = 246, 58.4%) and monitoring (n = 256, 60.8%), and errors involving patient adherence (n = 89, 21.1%) also were common. Cardiovascular medications (24.5%), followed by diuretics (22.1%), nonopioid analgesics (15.4%), hypoglycemics (10.9%), and anticoagulants (10.2%) were the most common medication categories associated with preventable adverse drug events. Electrolyte/renal (26.6%), gastrointestinal tract (21.1%), hemorrhagic (15.9%), metabolic/endocrine (13.8%), and neuropsychiatric (8.6%) events were the most common types of preventable adverse drug events. Adverse drug events are common and often preventable among older persons in the ambulatory clinical setting. More serious adverse drug events are more likely to be preventable. Prevention strategies should target the prescribing and monitoring stages of pharmaceutical care. Interventions focused on improving patient adherence with prescribed regimens and monitoring of prescribed medications also may be beneficial.