Information on pharmacoepidemiology is particularly important in developing countries where a rational drug policy has not been adopted. In the present study, a profile of 1769 doctors' prescriptions and 763 self-orders(1) were monitored at pharmacy outlets in the twin cities of Hyderabad and Secunderabad and 4 rural areas of Andhra Pradesh with the aim of identifying urban and rural differences, if any, in the self-medication rate, prescription costs, types of drugs purchased and factors influencing self-medication. Self-medication, expressed as the percentage of the total population that self-medicates, was found to be high in urban areas (37%) compared with rural areas (17%), and the majority of the over-the-counter sales were for prescription-only drugs. The majority of physicians' prescriptions were incomplete with respect to diagnosis and dosage regimen. The mean cost of the drugs purchased on doctors' prescriptions was 2-fold higher than the cost of drugs sold over the counter. A higher proportion of patients from rural areas (80%) purchased all the prescribed drugs compared with those from urban areas (54%). Financial constraints in urban areas were a major determinant in the partial purchase of prescribed drugs. In addition, the urban elite (i.e. professional people with high incomes, who comprise 18% of the total population) considered that all of the prescribed drugs were not necessary for their present disease. Nutritional products, potent compounds with analgesic, antipyretic and antiinflammatory effects, and broad spectrum antibiotics constituted a high proportion of prescriptions in both urban and rural areas. The consumption of food supplements was higher in rural areas than in urban areas. Based on WHO criteria, most of the drugs (60%) prescribed in rural areas were nonessential, compared with 47% in urban areas. The results of this study emphasise the need for comprehensive measures, including information, training, legislation and education at all levels of the drug delivery system, to rationalise drug therapy by improving prescribing patterns and influencing self-medication.