Some of the most intensive pharmacotherapy today occurs in nursing homes in very complex and vulnerable patients. The nursing home provides an opportunity for highly effective drug use, but it also presents risks for polypharmacy and adverse events. Nursing homes are complex social institutions, in which physicians, nurses, consultant pharmacists, other health care professionals, aides, and administrators must interact to make decisions about drug use for patients who generally are frail and have numerous comorbid conditions. Federal regulations have recently been implemented to direct the ways in which specific drugs are to be used in this setting. The nursing home environment can present an ideal opportunity for comprehensive drug regimen review, an exercise too often neglected in the care of elderly patients in all clinical settings. Psychoactive medications, analgesics, and laxatives are examples of drugs that should receive such review. The possible underuse of drug therapies that may be beneficial to nursing home residents, including antidepressant, antihypertensive, and antithrombotic agents; calcium supplements; and vaccines, must be further quantified and must receive increased attention. Morbidity and functional incapacity can be substantially reduced by applying currently established principles of geriatric pharmacology in the nursing home setting, but enormous gaps still exist in the knowledge base necessary to guide this aspect of geriatric medical practice. Data on the efficacy, toxicity, and cost-effectiveness of pharmacotherapeutic choices in nursing home patients are in short supply; considerably more clinical and epidemiologic research is needed to define the relations between the benefits and risks of drugs for this unique population.