The development, implementation, and operation of a pharmacy-based investigational drug service (IDS) at a university medical center are described. Before the IDS was established, pharmacy participation in investigational drug research was limited to the preparation of novel dosage forms. Medication errors, improper storage and labeling, and inadequate inventories of investigational drugs were common problems. Stepped-up enforcement by FDA and the National Cancer Institute (NCI) of guidelines for investigational drug control prompted the formation of a multidisciplinary task force, which recommended that the department of pharmaceutical services expand its support of investigational drug studies to include inventory control, record keeping, and clinical services. The IDS is supported by both the hospital and the school of medicine and currently receives 36% of its funding from principal investigator grants and contracts. The IDS coordinates more than 100 study protocols and dispenses more than 4000 doses of investigational drugs annually. The IDS is staffed by 1.0 full-time equivalent (FTE) clinical pharmacist and 0.5 FTE technician. Inventory control and billing functions are performed by a departmental microcomputer system. The IDS has demonstrated a positive gross margin for each of its first two years of operation. Problems associated with the control and use of investigational drugs at this institution have been successfully corrected by the implementation of a pharmacy-based IDS.