It is estimated that over three-quarters of a million people are injured or die in hospitals each year from adverse drug events (ADEs). The majority of medical errors result from poorly designed healthcare systems rather than from negligence on the part of healthcare providers. In general, healthcare systems rely on voluntary reporting, which seriously underestimates the number of medication errors and ADEs by as much as 90%. This paper reviews the causes and impact of medication errors and ADEs. It also reports studies that have used information technology (IT) to detect and prevent medication errors and ADEs. Significant reduction of medication errors and ADEs requires systemic implementation of IT, improvements in the reporting of errors, and integration of the components of the healthcare systems' information systems. At the present time, most healthcare systems should be able to use IT to detect and prevent ADEs.