Objective: The aim was to evaluate the drug utilization pattern of anti-diabetic drugs in diabetic outpatients and monitor the adverse drug reactions(ADRs) associated with anti-diabetic therapy.Methods: A prospective observational study was carried out in adult diabetic patients visiting the outpatient Departments of General Medicine andEndocrinology of a tertiary care hospital. Demographic data, drug utilization pattern and ADRs due to anti-diabetic drugs were summarized.Results: In the present study, 99 (50.3%) of the 197 diabetic patients were males. Majority of patients were in the age group of 51-60 years (39.6%) andmost of the patients (36.5%) had a diabetic history of <5 years. Metformin was the most commonly prescribed drug (68%), followed by sulfonylureaclass of drugs (49.7%). Nearly, 42% patients were using insulin preparations with 30.4% using biphasic isophane human insulin. Majority of thepatients (58.4%) were on multidrug therapy with two drug therapies being received by nearly 40%. Metformin was the most commonly prescribeddrug in monotherapy (18.8%) and glimepiride + metformin was the most common two drug therapy (13.2%). Co-morbid condition was found in 172patients (87.3%) with hypertension (68.5%) being the most common co-morbid condition. 17 ADRs were observed with hypoglycemia being the mostcommon ADR reported.Conclusions: Metformin was the most commonly used drug. The prescribing trend also appears to be moving towards combination therapyparticularly two drug therapies.Keywords: Drug utilization, Anti-diabetic drug, Adverse drug reaction