||Medication errors are common in hospitals which may occur at prescribing, dispensing and administration level. The objective of this study was to evaluate the dispensing errors that occur mainly due to similar sounding and looking medicines. A cross-sectional and observational study was conducted at Nobel Medical College Pharmacy, Biratnagar, Nepal during the months of August and September 2010. Three dispensing staffs were observed every day from 9 am to 5 pm for errors made while dispensing. Besides, a survey of look-alike and sound-alike medicines available at the pharmacy and their placement in the shelves was also done. Various reported cases of dispensing errors due to similar sounding and looking medicines were found. There were about twelve similar sounding brand names with different constituents in the pharmacy. Additionally, prescriptions or medication slips containing inappropriate information also led to dispensing errors. There is an urgent need of considering the medication errors with special emphasis to the similar sounding and looking medicines.