Pharmacoepidemiology is defined as the application of epidemiological reasoning methods and knowledge to the study of the uses and effects (beneficial and adverse) of drugs in human populations. OBJECTIVES: The purpose of this paper is to review the emerging role of pharmacoepidemiology in outcomes research. METHODS: This review has been based on a systematic literature search using Medline (PubMed), including the abstracts of the International Conference of Pharmacoepidemiolgy since 1990, and a review of core texts recommended by the International Society for Pharmacoepidemiology (ISPE). RESULTS: Three core functions were highlighted by review of the literature. The major role was found to be in the field of pharmacovigilance and its function in phase IV clinical trials or postmarketing surveillance. This was reflected by the predominance of pharmacovigilance abstracts accepted by the ISPE - 90% (201/223) of abstracts in 1990 and 72% (222/309) in 2001. Pharmacovigilance, the process of identifying and responding to drug safety issues during phase IV of drug development, is a key requirement of many drug regulatory authorities, including the FDA. Pharmacoepidemiology was also found to play a role in drug utilisation review studies and decision analytic modelling, although its use was found to be less substantial, constituting the balance of the accepted abstracts. CONCLUSION: Although pharmacoepidemiolgy has mainly been used in the field of pharmacovigilance, its use in decision analysis and drug utilisation review was found to be on the increase.