The frequency of potentially inappropriate prescribing for elderly outpatients and factors predicting inappropriate prescribing for these patients were studied. A panel of experts in geriatric medicine and geriatric pharmacology developed a list of 20 drugs generally considered to be inappropriate for elderly patients. Data on outpatient visits by patients aged 65 years or older were extracted from the 1994 National Hospital Ambulatory Medical Care Survey and analyzed with respect to the 20 potentially inappropriate medications. Potentially inappropriate medications were prescribed at 4.45% of elderly outpatient visits involving medications. An estimated 319,302 (95% confidence interval, 256,269 to 382,334) visits involved potentially inappropriate medications. The most frequently prescribed potentially inappropriate medications were diazepam, propoxyphene, dipyridamole, amitriptyline, and chlordiazepoxide; these drugs accounted for 85% of the outpatient visits involving potentially inappropriate medications. Patients were more likely to be prescribed potentially inappropriate medications if they had been referred; had a number of medications prescribed; had a prescription for an antianxiety agent, a sedative, an antidepressant, an analgesic, a platelet inhibitor, or an antispasmodic agent; or had a medication prescribed by a provider from a nonmetropolitan area. Ambulatory care providers prescribed at least one potentially inappropriate medication at 4.45% of visits by elderly patients at which a medication was prescribed; patient characteristics, provider characteristics, and drug-use profiles can be used to predict inappropriate prescribing.