Background Cutaneous Adverse Drug Reaction (CADR) is commonly encountered in our daily clinical practice1. Knowledge of the various patterns of CADR and the common offending agents will certainly help the physician in assessing the likelihood of the drug induced eruption as opposed to another dermatological diagnosis. Objectives To improve the understanding of CADRs in Penang General Hospital,To evaluate the incidence of CADR in Dermatology clinic Penang Hospital, to identify the common offending drugs and to describe the characteristics of CADR and to identify the associated risk factors of developing CADR. Materials and Methods This prospective study covers a 12-month period from April 2005 to March 2006. Demographic characteristics, causative drugs, management and treatment outcome were analysed. Results A total of 174 cases were referred to the Dermatology Clinic over 1-year period (Incidence of 4.9% of Dermatology Clinic new case attendees). Chinese comprises of 51.4%, followed by Malay 32.4%, Indian 10.8% and others 5.4%. Male to female ratio was 1.2:1. 74.1 % of CADR occurred between 13 - 59 year age group. The offending drugs included antimicrobials 28.6%, antituberculous 19.7%, analgesics 17.7%, allopurinol 8.4%, anticonvulsants 5.4%, HAART 1.0%, traditional medicines 2.0% and others 17.2%. High proportion of erythema multiforme syndrome cases was observed (23.5%). Toxic epidermal necrolysis has a high mortality rate. It was caused by amoxycillin, sulphonamide and phenytoin. 80.5% of CADR occurred within 2 weeks of drug introduction. Overall mortality rate secondary to CADR was 2.3%. Risk factors identified included poly-pharmacy (37.9%), renal insufficiency (31.0%), personal history of previous drug allergy (19.0%), liver disorder (18.4%), tuberculosis (16.7%), HIV infection (10.3%), autoimmune disorders (6.3%) and hematological malignancy (4.0%). Conclusions Diagnosis of CADR requires a high index of suspicion especially in those having symmetrical eruption within 2 months in relation to initial dose of medication, particularly the high risk groups.