Pharmacoepidemiology is the application of epidemiological reasoning, methods and knowledge to the study of the uses and effects (beneficial and adverse) of drugs in human populations. As referred to by the term ‘pharmacoepidemiology’, the discipline now enters into its second decade, although its origins go back to the beginnings of this century. This article reviews the opinions of leading pharmacoepidemiologists on the scope and prospects for pharmacoepidemiology, and summarises the most important challenges that the discipline faces on its way towards the next century. The future of pharmacoepidemiology requires the development of research methods more able to cope with the specific problems posed by the study of drugs, notably the issue of confounding by indication and the ability to adjust accurately for severity of disease. Capacity building should also continue during the next years; training of professionals, the optimisation of computerised databases for research purposes and their joint use with more traditional epidemiological methods are major challenges. From a public health perspective, a critical task is to assess the impact that vaccines and drugs have on the overall patterns of disease in well defined populations. © 1995, Adis International Limited. All rights reserved.