Objective: Despite 1999 Institute of Medicine report, which brought implications of adverse drug events (ADEs) in the US health care system in focus, the information on community based ADEs in the United States is still lacking. In this retrospective study we evaluate trends in occurrence, costs, and mortality due to community based ADE from 1996-2005. Methods: Discharge level data from community hospitals across the United States included in National Inpatient Sample (NIS) data from the Healthcare Cost and Utilization Project (HCUP) was used. Records with principal diagnosis of ADEs were extracted using 378 different ICD-9 CM and external cause of injury (E-codes) codes assigned for diagnosis of ADEs. ADEs due to adverse effects of appropriately administered drugs and drug poisoning were included. Hospitalizations due to illicit drug use, intentional harm, or self-intended events of overdosing or drug poisoning were excluded from the analysis. Results: There was an estimated increase of 16.7%, between 1999 and 2005, in the occurrence of ADEs as the primary diagnosis. Primary diagnosis of ADE was predominantly observed among whites compared to non-whites. Average age of people hospitalized with diagnosis of ADE increased from 36 years in 1996 to 40 years in 2005. Average duration of hospitalization between 2000 and 2005 was found to increase steadily. Average total charge towards hospitalization and care due to ADEs increased from $6070.20 to $14223.37 over the 10 years study period. Among those with a primary diagnosis of ADE, there was an increase in mortality during inpatient stay, from 0.82% in 1996 to 0.99% in 2005. Conclusion: Our study suggests a steady increase in community based hospitalizations due to ADEs since 1996 indicating a direct impact on health care costs and utilization of health care resources.