We performed a direct observation prepost study to evaluate the impact of barcode technology on medication dispensing errors and potential adverse drug events in the pharmacy of a tertiary-academic medical center. We found that barcode technology significantly reduced the rate of target dispensing errors leaving the pharmacy by 85%, from 0.37% to 0.06%. The rate of potential adverse drug events (ADEs) due to dispensing errors was also significantly reduced by 63%, from 0.19%to 0.069%. In a 735-bed hospital where 6 million doses of medications are dispensed per year, this technology is expected to prevent about 13,000 dispensing errors and 6,000 potential ADEs per year.