Bone marrow and peripheral blood cells may be adversely affected by drugs. Although the risk from most drugs is very small, many cases are reported because of the millions of doses of drugs taken each year by the population. Neutropenia, thrombocytopenia, hemolytic anemia, aplastic anemia, and macrocytic anemia are the commonest effects, in that order. Aplastic anemia is rare, but very serious when it does occur. Adverse effects may be produced by a direct toxic action of the drug or its metabolites on the bone marrow or, less often, on circulating cells. Antineoplastic drugs and chloramphenicol are examples. Most drugs produce their adverse effects through an immunological mechanism. The drug may act as a hapten or may affect the immune system leading to the production of antidrug antibodies and sometimes autoantibodies. Hemolytic anemia may result. Penicillins may behave in this manner. Some drugs act on erythrocytes with enzyme defects, e.g. glucose-6-phosphate dehydrogenase (G-6-PD) abnormalities, to produce hemolysis. In many cases, the mechanism underlying the adverse effect is unknown. The paper lists the drugs reported to have caused some hematological adverse effect and describes the mechanisms in those cases where they are known.