Adverse drug reactions (ADR) are uncommon causes of admission of neonates to the neonatal intensive care unit. The neonate, however, is potentially at significant risk for adverse drug reactions because of underdeveloped mechanisms and systems for handling drugs (the Gray Baby Syndrome with chloramphenicol as a classic example), the fact that infants in neonatal intensive care units are often critically ill with multiple organ system dysfunction, that they may be on multiple drugs, and that they may present with an adverse drug reaction as a result of exposure while still a fetus. There is also a history of misadventures in the neonatal intensive care unit and newborn nurseries due to exposure to antibacterial agents that produced systemic effects from percutaneous absorption. In this review, an overview of the mechanisms of adverse drug reactions will be presented, followed by a general review of the experience of adverse drug reactions in neonates and some specific examples of current adverse drug reactions and a suggested approach for the prevention and evaluation of adverse drug reactions in neonates.